UDYAM REGISTRATION

UDYAM REGISTRATION

On 26th June, 2020, Ministry of MSME issued a notification that a Micro, Small and Medium Enterprise will now be known as Udyam

The detailed criteria for the classification of MSMEs and the new procedure for MSME registration and the provisions to facilitate this process has also been notified. As per the notification, while calculating the turnover of MSME enterprises, export of goods or services or both will be excluded. 
 

Now the MSME registration process will be known as Udyam Registration as per the notification. Udyam registration can be done online on the portal of Udyam i.e www.udyamregistration.gov.in.  
 

No need to upload any documents, certificates or proof for the registration purpose. The applicant will only need the Aadhaar number for the Udyam Registration. This new MSME registration process i.e., Udyam Registration will come into effect from 01st July, 2020. 
 

New classification of the enterprises
 

As per the notification issued on 01st June, 2020, the ministry has revised the classification criteria for MSME enterprises. This will be effective from 01st July, 2020. The new criteria are as follows:

Classification Micro Small     Medium
Manufacturing and Service Enterprises   where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees; where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees;  where the investment in Plant and Machinery or Equipment not exceeding fifty crore rupees & turnover not exceeding two hundred and fifty crore rupees.

 

How one can become the MSME Enterprise?

By filing Udyam Registration online in the Udyam Registration portal, anyone can establish a micro, small or medium enterprise. This registration is based on self declaration.

There is no need to upload any documents, papers, certificates or proof for the MSME registration. After the registration, an enterprise will be referred as Udyam on the Udyam Portal.
 


 

A permanent identification number called as Udyam Registration Number will be provided to the enterprise after the registration. An enterprise will get a system generated certificate, known as Udyam Registration Certificate after the successful registration process.
 

Classification of the enterprise on the basis of investment and turnover

i.  An enterprise will be classified on the basis of composite criteria of investment and turnover. 

ii.  In case any enterprise has crossed the ceiling limits specified for its present category in either of the two criteria of investment or turnover, then it will cease to exist in that category and will be placed in the next higher category. But no enterprise will be placed in the lower category except in the case when it goes below the ceiling limits specified for its present category in both the criteria of investment as well as turnover. 

iii.  Every unit whose Goods and Services Tax Identification Number (GSTIN) listed against the same Permanent Account Number (PAN) will be jointly treated as one enterprise and the turnover and investment figures for all of such entities shall be seen together and only the aggregate values will be considered for deciding the category as micro, small or medium enterprise.
 

Investment in Plant and Machinery or Equipment Calculation

a.  Calculation of investment in plant and machinery or equipment will be based on the previous year Income Tax Return (ITR).

b.  For new enterprise, where the previous year IT return provision is not applicable, in that case the investment will be based on self-declaration of the promoter of the enterprise and such respite shall end after the 31st March of the financial year in which it files its first ITR.

c.  The word- plant and machinery or equipment of the enterprise, will have the same meaning as assigned to the plant and machinery in the Income Tax Rules, 1962 framed under the Income Tax Act, 1961 and will include all the tangible assets (except land and building, furniture and fittings).

d.  In case of new enterprise who is yet to file its ITR, the purchase or invoice value of a plant and machinery or equipment, whether purchased first hand or second hand, shall be taken into consideration after excluding the Goods and Services Tax (GST), on self-disclosure basis. 
 

Turnover calculation

I.  For the purpose of classification, exports of goods or services or both shall be excluded while calculating the turnover of any enterprise whether micro, small or medium.

II.  Information as regards turnover and export turnover for an enterprise shall be linked to the Income Tax Act or the Central Goods and Services Act (CGST Act) and the GSTIN.

III.  The figures related to turnover of such enterprise which do not have PAN will be considered on self-declaration basis upto the period 31st March, 2021 and thereafter, PAN and GSTIN shall be mandatory.
 

MSME Registration on “Udyam Portal”

  • On the site of Udyam Portal, the registration form will be provided.
     
  • To have Udyam Registration, only Aadhaar number is required. No fee is applicable for registration purpose. 
     
  • In case of Proprietorship firm – Aadhaar number of Proprietor is applicable. In case of Hindu Undivided Family – Karta’s Aadhaar required. In case of Partnership firm – Aadhaar number of Managing partner is mandatory.
     
  • In case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust - the organization or its authorized signatory will be required to provide its GSTIN, PAN along and Aadhaar number.
     
  • If an Enterprise which is registered as an Udyam using the PAN number, any information discrepancy for the previous years when it was not having the PAN shall be furnished on self-declaration basis. 
     
  • Except in the case when any number of activities which includes manufacturing or service or both may be specified or added in one Udyam Registration, the enterprise shall not file more than one Udyam Registration
     
  • In case anyone intentionally attempts the suppression of the facts and figures or misrepresents the same, shall be liable to penalty as mentioned under section 27 of the Act. 
     

Registration of existing enterprises

  • All the existing enterprises registered under EM–Part-II or UAM have to register again on the Udyam Registration portal on or after the 1st day of July, 2020. 
     
  • All the enterprises registered upto 30th June, 2020, have to be re-classified in accordance with this notification. 
     
  • The validity of the existing enterprises which are registered prior to 30th June, 2020, will be for a period up to the 31st of March, 2021
     
  • An enterprise registered with any other organisation under the MSME are supposed to be registered under Udyam Registration.
     

Updation of Information on Udyam Portal by the MSMEs

  • An entity having Udyam registration number is supposed to update its related information on Udyam registration portal along with the details of the income tax returns and GST return for the previous financial year and all other important information.
     
  • If the enterprise failed to update the same within the time period specified. It will be liable for the suspension of its status.
     
  • The classification of the enterprise will be updated according to the information provided by the entity or the information collected by the government.
     
  • An updation from a lower category to higher category (graduation) or from a higher category to a lower category (reverse graduation) will be communicated to the enterprise concerned.
     

Transition period due to change in the status

A.  In case of reverse graduation which might be a result of reclassification/actual changes in investment in the plant/machinery/equipment or turnover the enterprise will remain in its current category till the end of the ongoing financial year.

B.  An enterprise will maintain its prevailing status till expiry of one year from the close of the year of registration if there is an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent re-classification.
 

Edited by Minu Mishra

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