With effect from 01.07.2020, the Government of India notified revised criteria for classifying enterprises as Micro, Small and Medium Enterprises. This was done in supersession of earlier criteria specified under the Micro, Small and Medium Enterprises Act, 2006.
Micro Enterprise: Investment in Plant & Machinery not to exceed Rs.1 Crore and Turnover does not exceed Rs.5 Crore
Small Enterprise: Investment in Plant & Machinery not to exceed Rs.10 Crore and Turnover does not exceed Rs.50 Crore
Medium Enterprise: Investment in Plant & Machinery not to exceed Rs.50 Crore and Turnover does not exceed Rs.250 Crore.
The above criteria are composite, i.e., an enterprise which breaches any of the criteria is not eligible to be placed under that classification (Micro, Small or Medium as the case may be)
Any person who intends to establish a Micro, Small or Medium Enterprise may file Udyam Registration online on the new, “Udyam Registration” portal.
Upon registration, a registration number will be assigned and an e-certificate will be issued.
The registered enterprises, if they breach any of the criteria for classification, will be placed in the next higher category. However, if such registered enterprise goes below the criteria specified for that class, it will not be placed in the lower category.
All GSTIN linked to a single PAN will be consolidated and considered as a single enterprise for applying the classifying criteria.
Investment in Plant and Machinery:
The Calculation of investment in Plant and Machinery is linked to the Income Tax Return (ITR) of previous years filed by the enterprise and the term “Plant & Machinery” is as defined in the Income Tax Act, 1961.
In case of new enterprise, the investment will be based on self-declaration of the promoter for the first year and thereafter based on the ITR again. In case of self-declaration for the first year, the invoice value of new or second-hand Plant & Machinery without considering GST shall be reckoned.
In computing the cost, the cost of pollution control, R&D, industrial safety devices etc shall be excluded.
Turnover:
Exports of goods and/or services are excluded.
Turnover and Export turnover shall be linked to GSTIN and Income Tax Act.
Turnover of enterprises not having PAN will be considered on self-declaration basis up to 31.03.2021 only and thereafter PAN and GSTIN are mandatory.
Registration Process:
Form is provided online in Udyam portal
No fee for filing the application for registration.
Aadhar number of proprietor/managing partner/Karta/authorised signatory, as applicable, is required.
Single application for registration by one enterprise which can contain more than one activity of manufacture or combination of manufacture and service.
Intentional misrepresentation in case of self-declaration is punishable with penalty.
Existing Enterprises:
All enterprises registered under the erstwhile guidelines shall register again and they will be reclassified as per the new criteria as on 30.06.2020.
The existing enterprises, even though reclassified as on 30.06.2020, have to reapply but can continue up to 31.03.2021.
Updating the information:
Enterprise having Udyam Registration number shall update its information as per ITR and GST Returns for every financial year.
In case Registered enterprise goes below the criteria and slips from Medium to Small or Small to Micro, the enterprise shall continue to be in the present classification till the end of the financial year. Only w.e.f 1st April of the next financial year, the downgrading shall take effect.