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July 6, 2020

All existing enterprises registered under Udyog Aadhaar shall register again on the Udyam Registration by 31 March 2021 Know Online Process

by Mahesh Mara in Compliance Law

All existing enterprises registered under Udyog Aadhaar shall register again on the Udyam Registration by 31 March 2021 Know Online Process

Step wise process UDYAM registration for existing MSME registered before 30th June 2020

Formally, MSMEs are defined in terms of investment in plant and machinery. But this criterion for the definition was long criticized because credible and precise details of investments were not easily available by authorities. Therefore in February 2018, the Union Cabinet decided to change the criterion to “annual turnover”, which was more in line with the imposition of GST.

The Central Government, after obtaining the recommendations of the Advisory Committee, has notified certain criteria for classifying the enterprises as micro, small and medium enterprises and has specified the form and procedure for filing the memorandum (Udyam Registration), with effect from 1st July, 2020.

Any person who intends to establish a micro, small or medium enterprise may file Udyam Registration online in the Udyam Registration portal on self-declaration. No fees is charged for applying Udyam registration. Mandatory aadhaar of proprietor or partner or promoter or director or Karta is required in case of Udyam registration.

FOR EXISTING ENTERPRISES

  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 reclassified 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.

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How can an enterprise be classified as a micro, small or medium enterprise?

An enterprise on the fulfillment of the below mentioned criteria shall be classified as a micro, small or medium enterprise:-

Classified asMaximum Investment in plant and machinery or equipmentMaximum Turnover
Micro enterpriseRs 1 croreRs 5 crore
Small enterpriseRs 10 croreRs 50 crore
Medium enterpriseRs 50 croreRs 250 crore

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.

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.

All units with GSTIN listed against the same PAN shall be collectively treated as one enterprise and the turnover and investment figures for all of such entities shall be seen together.

Only the aggregate values will be considered for deciding the category as micro, small or medium enterprise.

How to calculate investment in plant and machinery and Turnover for MSME’s?

In case of existing enterprise the investment amount is calculated considering the details mentioned in the last ITR. In case of new enterprise a self-declaration of the promoter is required to consider the investment amount.

Inclusion and exclusion in calculation of amount of Investment:

Inclusion:

a. All Tangible assets

b. Purchase value of first hand or second hand plant and machinery excluding GST.

Exclusion:

a. Land and Building

b. Furniture and Fixtures

Inclusion and exclusion in calculation of amount of Turnover:

Turnover details in case of new enterprise shall be details mentioned in the last ITR. In case of new enterprise a self-declaration of the promoter is required to consider the investment amount.

Penalty in case of misrepresentation

Penalty for misrepresents or attempts to suppress the self-declared facts and figures shall be punishable:

a. In case of 1st Conviction, with fine which may extend to Rs. 1000/- and

b. In case of 2nd or subsequent Conviction with fine which shall not be less than Rs. 1000/- but may extend to Rs. 10,000.

Procedure for UDYAM registration for existing enterprise:

All enterprise registered under old method till 30/06/2020 shall be reclassified. Existing enterprise registered up to 30/03/2020 – valid till 31/03/2021. Failure to update within due date – Suspension of registration. Based on the latest information – The classification will be updated. The following is the process for UDYAM registration:

Step 1: Go to https://udyamregistration.gov.in/

Click on “For those already having registered as EM-II or UAM” option

Step 2: Fill your Udyog Aadhaar details and select OTP option i.e. whether you want to receive OTP on mobile or on registered mail id.

Now, click on “Validate & Generate OTP” and enter the OTP number that you have received in your mobile number or E-mail and select Validate.

Your Udyog Aadhaar will be validated successfully.

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