Friday, June 26, 2020

Take New Udyam Registration for MSME w.e.f. 1st July 2020

On the 26th of June, 2020, the Government has announced a new procedure to obtain a fresh Udyam Registration for MSMEs w.e.f. 1st July, 2020. Here are the details.

MSME Classification

a) Micro: Investment in Plant & Machinery or Equipment does not exceed Rs. 1 Crore, and Turnover does not exceed Rs. 5 Crores

b) Small: Investment in Plant & Machinery or Equipment does not exceed Rs. 10 Crore, and Turnover does not exceed Rs. 50 Crores

c) Medium: Investment in Plant & Machinery or Equipment does not exceed Rs. 50 Crore, and Turnover does not exceed Rs. 250 Crores

Calculation of Investment in Plant & Machinery or Equipment

a) The calculation of investment in plant & machinery or equipment will be linked to the Income Tax Return (ITR) of the previous year filed.

b) The definition and classification of plant & machinery will be the same as taken under the Income Tax Rules and shall include all tangible assets other than land and building, furniture and fittings.

c) In case of a new enterprise where no prior ITR is available, the investment will be based on self-declaration of the promoter. The purchase value of a plant & machinery or equipment, whether new or second-hand, shall be taken into account excluding Goods and Services Tax (GST) for such an enterprise.

Calculation of Turnover

a) Exports of goods or services or both, shall be excluded while calculating the turnover for MSME classification

b) Information as regards turnover and exports turnover for an enterprise shall be linked to declarations in Income Tax and GST. 

c) All units with Goods and Services Tax Identification Number (GSTIN) listed against the same PAN shall be collectively treated as one enterprise and the aggregate turnover and investment figures for all of such entities shall be seen together.

Registration on Udyam Portal

a) All existing enterprises registered under Udyog Adhaar (MSME) shall register again on the Udyam Registration portal on or after 01-Jul-2020. An e-certificate named Udyam Registration Certificate shall be issued on completion of the registration process.

b) The existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for
a period up to the 31-Mar-2021.

c) Registration shall be on the Udyam Registration Portal

d) Aadhaar number of the promoter is mandatory for registration

e) The organisation or its authorized signatory shall provide its GSTIN and PAN as well

f) No enterprise shall file more than one Udyam Registration and any number of activities including manufacturing or service or both may be specified or added in one Udyam Registration

g) Misrepresenting facts during registration shall be liable to penalty.

Updation of Information on the Portal

a) An enterprise having Udyam Registration Number shall update its information online in the Udyam Registration portal, including the details of the ITR and the GST Return for the previous financial year and such other additional information as may be required, on self-declaration basis.

b) Failure to update the information online on Udyam Registration portal will render the enterprise liable for suspension.

c) In case of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent re-classification, an enterprise will maintain its prevailing status till expiry of one year from the close of the year of registration.

d) In case of reverse-graduation, whether as a result of re-classification or due to actual changes in investment in plant and machinery or equipment or turnover or both, and whether the enterprise is registered under the Act or not, the enterprise will continue in its present category till the closure of the financial year and it will be given the benefit of the changed status only with effect from 1st April of the financial year following the year in which such change took place.