MSME / UDYAM Registrations are come under the preview of Medium Enterprises Development (MSMED) Act, 2006. The Government of India, Ministry of Micro, Small and Medium Enterprises vide Gazette of India, Extraordinary, Part-II, Section-3, Sub-Section(ii), Dated the 26th June, 2020 notified a composite criteria consisting of both investment and turnover as criteria for classifying the enterprises as Micro, Small and Medium Enterprises with effect from the 1st day of July,2020. In order to conform new definition of MSMEs and ease of doing Business this system would facilitate MSMEs for a permanent Registration i.e ‘Udyam Registration’. Any entrepreneurs who intend to register for MSME / UDYAM Registrations are login into https://udyamregistration.gov.in/. Definitions of Micro, Small & Medium Enterprises In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two classes:
Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last six decades. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country. Ministry of Micro, Small & Medium Enterprises (M/o MSME) envision a vibrant MSME sector by promoting growth and development of the MSME Sector, including Khadi, Village and Coir Industries, in cooperation with concerned Ministries/Departments, State Governments and other Stakeholders, by providing support to existing enterprises and encouraging creation of new enterprises.
“The Micro, Small and Medium Enterprises Development Act, 2006 is describes the classifications of enterprises” . Under this Act all the enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria, namely: —
(i) a micro enterprise, where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;
(ii) a small enterprise, where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and
(iii) a medium enterprise, where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.
(1) Any person who intends to establish a micro, small or medium enterprise may file UDYAM Registration online in the UDYAM Registration portal, based on self-declaration with no requirement to upload documents, papers, certificates or proof.
(2) On registration, an enterprise (referred to as “UDYAM” in the UDYAM Registration portal) will be assigned a permanent identity number to be known as “‘UDYAM Registration Number”.
(3) An e-certificate, namely, “UDYAM Registration Certificate” shall be issued on completion of the registration process.
Salient Features of UDYAM Registration :
Priority Sector Lending:
The Priority Sector Lending (PSL) guidelines are issued by Reserve Bank of India. RBI has issued guidelines on Priority Sector Lending vide its circular no RBI/FIDD/2020- 21/72 Master Directions FIDD.CO.Plan.BC.5/04.09.01/2020-21 dated September 04, 2020. Accordingly, the categories under priority sector are (i) Agriculture (ii) Micro, Small and Medium Enterprises (iii) Export Credit (iv) Education (v) Housing (vi) Social Infrastructure (vii) Renewable Energy (viii) Others. Therefore, MSME Sector falls under Priority Sector Lending. As per RBI, the definition of MSMEs will be as per Government of India (GoI), Gazette Notification S.O. 2119 (E) dated June 26, 2020 read with circular RBI/2020-2021/10 FIDD.MSME & NFS.BC.No.3/06.02.31/2020-21 read with FIDD.MSME & NFS. BC. No.4 / 06.02.31/2020-21 dated July 2, 2020, August 21, 2020 respectively on ‘Credit flow to Micro, Small and Medium Enterprises Sector’ and updated from time to time. Further, such MSMEs should be engaged in the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 or engaged in providing or rendering of any service or services. All bank loans to MSMEs conforming to the RBI guidelines qualify for classification under priority sector lending.
For Registration Services
Post Registration Services
Dated the 26th June, 2020
In exercise of the powers conferred by sub-section (1) read with sub-section (9) of section 7 and sub-section (2) read with sub-section (3) of section 8, of the Micro, Small and Medium Enterprises Development Act, 2006, (27 of 2006), hereinafter referred to as the said Act, and in supersession of the notifications of the Government of India in the Ministry of Micro, Small and Medium Enterprises number S.O.1702 (E ), dated the 1st June, 2020, S.O. 2052 (E), dated the 30th June, 2017, S.O.3322(E ), dated the 1st November, 2013 and S.O.1722 (E ), dated the 5th October, 2006, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (ii), except as respects things done or omitted to be done before such supersession, the Central Government, after obtaining the recommendations of the Advisory Committee in this behalf, hereby notifies certain criteria for classifying the enterprises as micro, small and medium enterprises and specifies the form and procedure for filing the memorandum (hereafter in this notification to be known as “Udyam Registration”), with effect from the 1st day of July, 2020, namely:–
1) A composite criterion of investment and turnover shall apply for classification of an enterprise as micro, small or medium.
2) If an enterprise crosses the ceiling limits specified for its present category in either of the two criteria of investment or turnover, it will cease to exist in that category and be placed in the next higher category but no enterprise shall be placed in the lower category unless it goes below the ceiling limits specified for its present category in both the criteria of investment as well as turnover.
3) All units with Goods and Services Tax Identification Number (GSTIN) listed against the same Permanent Account Number (PAN) shall be collectively 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.
1) The calculation of investment in plant and machinery or equipment will be linked to the Income Tax Return (ITR) of the previous years filed under the Income Tax Act, 1961.
2) In case of a new enterprise, where no prior ITR is available, the investment will be based on self-declaration of the promoter of the enterprise and such relaxation shall end after the 31st March of the financial year in which it files its first ITR.
3) The expression “plant and machinery or equipment” of the enterprise, shall 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 shall include all tangible assets (other than land and building, furniture and fittings).
4) The purchase (invoice) value of a plant and machinery or equipment, whether purchased first hand or second hand, 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.
5) The cost of certain items specified in the Explanation I to sub-section (1) of section 7 of the Act shall be excluded from the calculation of the amount of investment in plant and machinery.
1) Exports of goods or services or both, shall be excluded while calculating the turnover of any enterprise whether micro, small or medium, for the purposes of classification.
2) Information as regards turnover and exports turnover for an enterprise shall be linked to the Income Tax Act or the Central Goods and Services Act (CGST Act) and the GSTIN.
3) The turnover related figures of such enterprise which do not have PAN will be considered on self-declaration basis for a period up to 31st March, 2021 and thereafter, PAN and GSTIN shall be mandatory.
1) 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.
2) Failure to update the relevant information within the period specified in the online Udyam Registration portal will render the enterprise liable for suspension of its status.
3) Based on the information furnished or gathered from Government’s sources including ITR or GST return, the classification of the enterprise will be updated.
4) In case of graduation (from a lower to a higher category) or reverse-graduation (sliding down to lower category) of an enterprise, a communication will be sent to the enterprise about the change in the status.
5) In case of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent reclassification, an enterprise will maintain its prevailing status till expiry of one year from the close of the year of registration.
6) In case of reverse-graduation of an enterprise, 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.
1) The Champions Control Rooms functioning in various institutions and offices of the Ministry of Micro, Small and Medium Enterprises including the Development Institutes (MSME-DI) shall act as Single Window Systems for facilitating the registration process and further handholding the micro, small and medium enterprises in all possible manner.
2) The District Industries Centres (DICs) will also act as Single Window facilitation Systems in their Districts.
3) Any person who is not able to file the Udyam Registration for any reason including for lack of Aadhaar number, may approach any of the above Single Window Systems for Udyam Registration purposes with his Aadhaar enrolment identity slip or copy of Aadhaar enrolment request or bank photo pass book or voter identity card or passport or driving licence and the Single Window Systems will facilitate the process including getting an Aadhaar number and thereafter in the further process of Udyam Registration.
4) In case of any discrepancy or complaint, the General Manager of the District Industries Centre of the concerned District shall undertake an enquiry for verification of the details of Udyam Registration submitted by the enterprise and thereafter forward the matter with necessary remarks to the Director or Commissioner or Industry Secretary concerned of the State Government who after issuing a notice to the enterprise and after giving an opportunity to present its case and based on the findings, may amend the details or recommend to the Ministry of Micro, Small or Medium Enterprises, Government of India, for cancellation of the Udyam Registration Certificate.
Step 1 : The form for registration shall be as provided in the Udyam Registration portal. There will be no fee for filing Udyam Registration.
Step 2 : Aadhaar number shall be required for Udyam Registration.
Step 3 : The Aadhaar number shall be of the proprietor in the case of a proprietorship firm, of the managing partner in the case of a partnership firm and of a Karta in the case of a Hindu Undivided Family (HUF).
Step 4 : In case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust, the organisation or its authorised signatory shall provide its GSTIN and PAN along with its Aadhaar number.
Step 5 : In case an enterprise is duly registered as an Udyam with PAN, any deficiency of information for previous years when it did not have PAN shall be filled up on self-declaration basis.
Step 6 : No enterprise shall file more than one Udyam Registration: Provided that any number of activities including manufacturing or service or both may be specified or added in one Udyam Registration.
Step 7 : Whoever intentionally misrepresents or attempts to suppress the self-declared facts and figures appearing in the Udyam Registration or updation process shall be liable to such penalty as specified under section 27 of the Act.
(1) All existing enterprises registered under EM–Part-II or UAM shall register again on the Udyam Registration portal on or after the 1st day of July, 2020.
(2) All enterprises registered till 30th June, 2020, shall be re-classified in accordance with this notification.
(3) The existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for a period up to the 31stday of March, 2021.
(4) An enterprise registered with any other organisation under the Ministry of Micro, Small and Medium Enterprises shall register itself under Udyam Registration.
Government has organised a full system of Facilitation for Registration Process
MSME Registration is free, paperless and based on self- declaration
Ministry of Micro, Small and Medium Enterprises, has framed a Scheme for the purpose of providing guarantees in respect of credit facilities extended by eligible and registered scheduled commercial banks to borrowers in Micro, Small and Medium Enterprises (MSMEs). The scheme will be operationalized through a special window created for this purpose under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
The Scheme is named as ‘Distressed Assets Fund – Subordinate Debt for Stressed MSMEs’ and the credit product for which guarantee would be provided under the Scheme shall be named as ‘Credit Guarantee Scheme for Subordinate Debt (CGSSD)’(hereinafter referred as the ‘Scheme’).
To provide guarantee coverage for the CGSSD to provide Sub-Debt support in respect of restructuring of MSMEs. 90% guarantee coverage would come from scheme/ Trust and remaining 10% from the concerned promoter(s). The objective of the scheme is to provide personal loan through banks to the promoters of stressed MSMEs for infusion as equity / quasi equity in the business eligible for restructuring, as per RBI guidelines for restructuring of stressed MSME advances.
The Scheme shall come into force from the date of notification by the Government of India or such other date as may be specified by the Trust.
To know more about Credit Guarantee Scheme for Subordinate Debt (CGSSD). Read more
|001||Extension of Udyog Aadhaar Memorandum (UAM) validity upto 30/06/2022 ( Notification no. S.O.2134(E) dated 06.05.2022 ) – regarding||06/05/2022|
|002||Extension of Udyog Aadhaar Memorandum (UAM) validity upto 31/03/2022 ( Notification no. S.O.278(E) dated 19.01.2022 ) – regarding||19/01/2022|
|003||Udyam Registration: Clarification regarding Financial Year in respect of the data of Investment, Turnover and Export from the IT Department and GSTN for effecting the Classification of MSMEs -reg.||28/09/2021|
|004||Inclusion of urban street vendors in MSME category – reg.||09/08/2021|
|005||Activities (NIC code) under MSMED Act, 2006 for Udyam Registration – Addition of Retail and Wholesale Trade – regarding||02/07/2021|
|006||Extension of Udyog Aadhaar Memorandum (UAM) validity upto 31/12/2021 ( Notification no. S.O.2347(E) dated 16.06.2021 ) – regarding||16/06/2021|
|007||Amendment in the notification no. S.O.2119(E) dated 26.06.2020 – regarding.||05/03/2021|
|008||Activities (NIC Codes) not covered (with exception of certain categories) under MSMED Act, 2006 for Udyam Registration-regarding.||01/12/2020|
|009||A note of Thanks from M1xchange (TReDS)||05/10/2020|
|010||RBI NOTIFICATION (RBI/2020-2021/26 FIDD.MSME & NFS.BC.No.4/06.02.31/2020-21)||21/08/2020|
|011||Clarification on existing Entrepreneurs Memorandum (EM) Part-II / Udyog Aadhaar Memorandum (UAM) / New Udyam Registration-regarding||06/08/2020|
|012||Emergency Credit Line Guarantee Scheme (ECLGS) – Modification in Operational Guideline||04/08/2020|
|013||Substitution of “Udyog Aadhaar Memorandum (UAM)” with “Udyam Certificate” in the OM no. UAM/MC/01/2017-SME dated 27.06.2017 on the subject Activities (NIC codes) not covered under MSMED Act, 2006 for registration of Udyog Aadhaar Memorandum (UAM) – regarding||17/07/2020|
|014||RBI Notification (RBI/2020-2021/10 FIDD.MSME & NFS.BC.No.3/06.02.31/2020-21)||02/07/2020|
|016||Prompt payment to suppliers including MSMEs: Charging of interest on delayed payments in Government e-Marketplace (GeM)||03/09/2020|