How to Register your company as MSME under Udyam ? Benefits in register...

 Micro, Small
and Medium Enterprises (MSME) are seen as a key player in causing momentum in
the economy. The definition of MSME comes from section 7 of the Micro, Small and
Medium Enterprises Development Act, 2006 ('Act'). Ministry of Finance ,
India  on 1st June 2020 via notification
amended the definition of MSME in order to increase the scope and thereby
bringing larger number of firms within the ambit of MSME. As per the revised
definition, the classification is based on the investment and turnover of the
entity.

The new definition of MSME

·      
Revised Classification applicable w.e.f .1st July
2020

·      
 Composite
Criteria: Investment in Plant & Machinery/equipment and Annual Turnover

Classification	Micro	Small	Medium
Manufacturing Enterprises and Enterprises rendering Services	Investment in Plant and Machinery or Equipment: Not more than Rs.1 crore and Annual Turnover; not more than Rs. 5 crores	Investment in Plant and Machinery or Equipment: Not more than Rs.10 crore and Annual Turnover; not more than Rs. 50 crores	Investment in Plant and Machinery or Equipment: Not more than Rs.50 crore and Annual Turnover; not more than Rs. 250 crores

The new definition eliminates
the bifurcation of investment limits for the Manufacturing and Service industry
which were earlier in existence. Hence, it is anticipated that a sizable number
of service providers would be covered as they be likely to have a less
significant investment in plant and machinery or equipment and turnover as contrasted
to Manufacturing entity with similar revenues.

The above notification requires
for a process for registration of MSME which shall become applicable from 1st
July 2020, the requirement of Udyam Registration shall also be applicable to existing MSMEs.

Hence , registration under Udyam
is now be considered as a pre-obligatory for availing benefit under the various
schemes introduced by the Finance Ministry

MSME Registration Process under
UDYAM

Step 1	The Enterprise shall register itself on the Udyam Registration Portal
Step 2	A Permanent Identity Number will be generated
Step 3	Aadhar shall be mandatory for registration on Udyam Registration portal. No fees is to be paid or any documents have to be submitted.
Step 4	On Completion of registration , a E-Certificate for registration containing the permanent Identity number shall be generated.
Step 5	On completion , the Enterprise shall submit Income Tax Return , GST Return on the Udyam Aadhar Portal
Step 6	On the basis of ITR/ GSTR uploaded , the re-classification within categories of MSME may be made.

MSME Registration on the basis of self-declaration

As per the Udyam Registration
requirement, it is evident that Udyam Registration can be done on the basis of
filing a self-declaration.

The relevant extract of the
notification states as follows-   '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.”

MSME Registration Document
Requirements:

Type of Entity	Aadhar of
Proprietorship Firm	Proprietor
Partnership Firm	Managing Partner
HUF	Karta
Company / LLP / Co-operatives / Trust / Organizations*	Authorized Signatory

Plant, Machinery and Equipment.

The Plant, Machinery and
Equipment shall have same meaning as under Income Tax Rules, 1962 hence not
include land, building and furniture and fittings. Further it shall not include
items mentioned in Explanation 1 to Section 7(1) [4] of MSME Act 2006 shall be
excluded.

Turnover

On the similar grounds as investment the turnover
shall also be calculated on collective basis for all units with Goods and
Services Tax Identification Number (GSTIN) listed against the same Permanent
Account Number (PAN) and all such units shall be treated as one enterprise and
turnover 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.

USER FRIENDLY REGISTRATION UNDER
UDYAM

The new process provides an easy, quick, and simple
method for registration that will be linked to information submitted under
Income Tax and GST, hence being user friendly as well as keeping a check on the
reliability of the information. The move is intending to promote ease of doing
business in lieu of the introduction of the Atmanirbhar Bharat scheme. This
process and amended definition would help more MSME to take benefit of
government schemes for MSME hence providing them an elevated pedestal to
kick-start economy after the COVID restrictions are lifted.

Why a MSME has to Register under
UDYAM?

1.  Bank Loans (Collateral Free)

The Government of India has made collateral-free
credit available to all small and micro business sectors.

2.  Subsidy on Patent Registration

A substantial 50% subsidy is
given to the Enterprise that has the certificate of registration granted by
MSME.

3.  Overdraft Interest Rate
Exemption

Enterprises registered under
MSME can avail a benefit of 1% on the Over Draft as stated in a scheme that varies
from bank to bank

4.  Industrial Promotion Subsidy
Eligibility

Enterprises registered under MSME are also eligible
for a subsidy for Industrial Promotion as suggested by the Government.

5.  Protection against Payments
(Delayed Payments

If the buyer delays the payment
for more than 45 days after accepting the products or services then the buyer
has to pay compound interest along with interests (monthly) on the amount that
was agreed to be paid. The interest rate is three times the rate that is
notified by the Reserve Bank of India.

6.  Savings in Electricity Bills

There will be a substantial
savings in Power bills as the government will offer handsome subsidy to MSME
units for their power consumption.

7.  MSME Units Can Claim Reimbursed
for ISO Registration

100% reimbursement of ISO
registration expenses will be reimbursed to MSME units by the government.