Revised MSME Criteria

Posted by udyam registrationonline on July 1st, 2021

Micro-Small and Medium Enterprises (MSMEs) play an important role in our country's socioeconomic growth. MSMEs are governed by the Ministry of Micro, Small, and Medium Enterprises, and must be registered in order to benefit from the Micro, Small, and Medium Enterprises Development (MSMED) Act. MSME/Udyam registration is critical since it allows these businesses to participate in a variety of government-sponsored programmes. MSMEs are divided into two groups: manufacturing and service businesses.

What are the requirements for registering as an MSME?

It is an online process that involves the certification of your Aadhar number. The certificate can be obtained online without the requirement for a physical copy. Furthermore, the process for MSME Certificate holders to get licences, permits, and registrations from their relevant authorities in any field for their firm is streamlined even further. As a result, they will be able to provide the Certificate of MSME Registration while submitting an application. Not only that, but applicants can claim reimbursement for ISO Certificate Expenses by submitting an application to the appropriate authority, which is supported by MSME/Udyam Registration Certificates.

What are the advantages of MSME?

1. Bank loans become cheaper as a result of registration because the interest rate is quite low, around 1 to 1.5 percent. Interest rates are far lower than those charged on traditional loans.

2. For unpaid MSME amounts, there is a one-time settlement fee.

3. It permitted minimum alternative tax (MAT) credits to be carried forward for up to 15 years instead of the previous 10 years.

4. There are a number of government tenders that are only open to MSME businesses.

5. Once registered, the cost of obtaining a patent or establishing an industry is reduced due to the numerous rebates and concessions available.

6. Credit is readily available to them.

7. MSME-registered businesses are given priority for government license and certifications.

8. MSME are eligible for a variety of tax breaks.

MSME has a new definition:

The government has taken the following steps to redefine the MSME:

- Amount of money that can be invested has increased.

- Incorporated additional turnover requirements

- Discrimination between the manufacturing and service sectors was eliminated.

- Changes to the law will be implemented.

Take a look at the new MSME definition:

The government has changed the MSME classification under the Atmanirbhar Bharat Abhiyan (ABA) by incorporating composite criteria for both investment and annual turnover. In addition, the MSME definition no longer distinguishes between the manufacturing and service industries. This removal will bring the sectors closer together. The following is the updated MSME categorization, which takes into account both investment and yearly turnover when determining an MSME.

REVISED MSME CLASSIFICATION:

MICRO UNITS are companies having a revenue of less than Rs. 10 crore and a capital investment of less than Rs. 1 crore.

Companies with a turnover of less than Rs. 50 crore and an investment of up to Rs. 10 crore are classified as SMALL UNITS.

Businesses with a turnover of less than Rs. 250 crore and investments of up to Rs. 50 crore are classified as MEDIUM UNITS.

The following are the contributions of Micro, Small, and Medium Enterprises to the Indian economy:

1. Approximately 36.1 million Micro, Small, and Medium Enterprises (MSMEs) are currently producing in India.

2. MSMEs employ around 120 million people in India.

3. MSMEs account for 45 percent of India's overall export revenue.

4. MSMEs make up 6.11 percent of manufacturing GDP and 24.63 percent of service GDP.

5. The MSME sector has continually risen at a pace of ten percent each year on average.

6. This sector accounts for around 8% of the country's Gross Domestic Product.

7. According to a research conducted by the Confederation of Indian Industries (CII) on Indian MSMEs, the MSME sector will contribute roughly 50% of India's GDP by 2024.

8. Many MSMEs are located in rural areas, which slows the movement of people from rural to urban areas.