Page 48 - Banking Finance July 2020

ARTICLE

Existing and Revised Definition of MSMEs

Existing MSME Classification
Criteria : Investment in Plant and Machinery or Equipment
Classification Micro Small Medium

Mfg Enterprises Investment<Rs.25 lac Investment<Rs.5 Cr. Investment<Rs.10 Cr.
Service Enterprises Investment<Rs.10 lac Investment<Rs.2 Cr. Investment<Rs.5 Cr.
Revised MSME Classification
Composite Criteria : Investment and Annual Turnover
Classification Micro Small Medium
Manufacturing and Investment<Rs.1 Cr. Investment<Rs.10 Cr. Investment<Rs.50 Cr.
Service Enterprises & & &
Turnover<Rs.5 Cr. Turnover<Rs.50 Cr. Turnover<Rs.250 Cr.

Questionnaire Answers
How to become MSME? o File Udyam Registration online in the Udyam Registration Portal
o Based on self declaration
o No requirements to upload documents, papers, certificates or proof
o On registration, Udyam Registration Number (URN) will be allotted.
o E- Certificate: Udyam Registration Certificate on completion of the registration
process
Highlight the norms of o Up gradation to next Higher Category: If enterprise crosses the ceiling limits
shifting from one category specified for its present category in either of two criteria - Investment as well
to another (both down as Turnover
gradation and up gradation). o Down gradation to lower Category: No enterprise shall be placed in the lower
category unless it goes below the ceiling limits specified for its present category
in both of the criteria - Investment as well as Turnover. Status quo will be
maintained during that financial year. Benefits of the changed status will be
available from 1st April of the ensuing year.
o All units with GST numbers listed against same PAN shall be collectively treated
as one Enterprise
o The Turnover & Investment will be clubbed for all the units and then the
category will be decided
What is the process of o Plant & Machinery or equipment: Include all tangible assets (other than land
calculation of investment in and building, furniture and fittings).
plant and machinery or o Purchase value of P & M: Whether purchased first hand or second hand,
equipment? purchase invoice value shall be taken into account excluding Goods and Services
Tax (GST), on self-disclosure basis, if the enterprise is a new one without any
ITR.
o Calculation of turnover: Exports of goods or services or both, shall be excluded
while calculating the turnover of any enterprises.
o Enterprises having no PAN: For such enterprises, Turnover will be considered on
declaration basis only for a period upto 31 March 2021 and thereafter PAN and
GSTIN shall be mandatory.

48 | 2020 | JULY | BANKING FINANCE