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Is your business registered as MSME? If not, do it right away
Definition of Micro Small or Medium Enterprise (MSME)
An enterprise shall be classified as a micro, small or medium enterprise based on the following –
Criteria |
Micro-Enterprise |
Small Enterprise |
Medium Enterprise |
The investment in plant and machinery or equipment |
Less than Rs.1 Crore |
Less than Rs.10 Crores |
Less than Rs.50 Crores |
Turnover |
Less than Rs.5 Crore |
Less than Rs.50 Crores |
Less than Rs.250 Crores |
Registration as MSME
Any person such as an individual, proprietor, firm, company, who intends to establish MSME may (not mandatory) file an application online at the Udyam registration portal. Upon registration, an enterprise will be assigned a permanent identity number known as ‘Udyam Registration Number” and an e-certificate will be issued.
We have already taken Registration under EM Part II. Should we register again?
Yes. All existing enterprises registered under EM Part II or UAM shall register again on the Udyam Registration Portal. The validity of the existing registration other than Udyam expires on 31st March 2021
Can we update the information in the portal?
Those who have already registered under Udyam can update the information online, including ITR, GST, etc.
How to classify the enterprise?
The above is a composite criterion. If an enterprise crosses the limit specified above for its present category in either of the two criteria, it will be placed in the next higher category.
Example – M/s ABC Enterprise has invested Rs.50 Lakhs in equipment and is having a turnover of Rs.7 Crores- It will be classified as “Small Enterprise” (as the turnover is more than the limit for Micro Enterprise)
How to compute the Investment Value?
The investment value and turnover are considered on an aggregate basis. All units with common GSTN and PAN shall be collectively treated as one enterprise and the turnover and investment figures for all such entities shall be considered together. The investment details will be picked up from the Income Tax return filed during the previous year. If no ITR is available in case of new business, a self-declaration is considered.
What is included in Plant and Machinery?
The expression Plant and Machinery or equipment shall have the same meaning as given in Income Tax Rules. It shall include all tangible assets, excluding land and building, furniture & fittings, intangibles such as copyright, patent, Goodwill, etc.
The purchase value of an asset is considered excluding GST.
The purchase of second-hand machines is also considered for calculating the investment in assets.
What is excluded from the turnover?
Export of goods or services or both shall be excluded while calculating the turnover of any enterprise.
Whether Aadhar number is required for Udyam registration?
Yes. Aadhar number of the proprietor, managing partner, director, or authorized signatory is required.
Is there any penalty for a wrong declaration?
Yes. In case of first conviction – fine up to Rs.1,000. In case of second or subsequent conviction – fine up to Rs.10,000
Will the classification from Micro to Small (lower to higher) or reverse (higher to lower) happen automatically?
Yes, based on the information provided in ITR and GST, the classification of the enterprise will be updated. In such cases, a communication will be sent to the enterprise about the changes in the status.
What if online registration can’t be done?
Any person who is not able to file the Udyam Registration for any reason including for lack of Aadhaar number may approach The District Industries Centres (DIC) who act as Single Window Systems for Udyam Registration purposes.
What are the benefits of MSME registration?
The Governments, both Union and State, provide several incentive schemes for small enterprises. These benefits can only be availed if the business is registered as an MSME enterprise.
Those who intend to know more about the benefits and need assistance may contact us at This email address is being protected from spambots. You need JavaScript enabled to view it.