Udyam Registration

Q. What is Udyam Registration?

Ans:- Udyam Registration is the new process of MSME/UDYOG AADHAAR Registration launched by the Ministry of Micro, Small and Medium Enterprises on July 1, 2020.

Q. Does the Government Issue a physical copy of the certificate?

Ans:- In the interest of environment no physical copy of the MSME Certificate will be issued. The government believes in paperless work.

Q. Is an Aadhar number mandatory for SSI/MSME/Udyog Aadhar/Udyam Registration?

Ans:- At present Aadhaar Number is mandatory for issuance of SSI/MSME/Udyog Aadhar/Udyam Registration.

Q. What is the process of Udyam Registration?

Ans:- The following are the process of Udyam Registration-

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.

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”.

An e-certificate, namely, “Udyam Registration Certificate” shall be issued on completion of the registration process.

For New Registration

• Aadhaar number shall be required for Udyam Registration.
• 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).
• In the case of a company or a Limited Liability Partnership or a Cooperative Society or a Society or Trust, the organization or its authorized signatory shall provide its GSTIN and PAN along with its Aadhaar number.
• In case an enterprise is duly registered as a Udyam with PAN, any deficiency of information for previous years when it did not have PAN shall be filled up on self-declaration basis.
• 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 to one Udyam Registration.
• 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.

For Existing Organisation

• 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.
• All enterprises registered till 30th June 2020, shall be reclassified by this notification.
• The existing enterprises registered before 30th June 2020, shall continue to be valid only for a period up to the 31st day of December 2021.
• An enterprise registered with any other organization under the Ministry of Micro, Small and Medium Enterprises shall register itself under Udyam Registration.

Q. What is Micro, Small & Medium Enterprises?

Ans:- The following are the criteria for micro, small & medium enterprises-

• 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;
• 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
• 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.

Q. What are composite criteria of Investment & Turnover for classification of an enterprise as micro, small, or medium ?

Ans:- The following are the composite criteria of Investment & Turnover for classification-

• A composite criterion of investment and turnover shall apply for the classification of an enterprise as micro, small, or medium.
• 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.
• 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.

Q. How investments in plant and machinery or equipment are calculated?

Ans:- The following are the ways for calculation of investments in plant and machinery or equipment-

• 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, of 1961.
• 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.
• 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).
• 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 a self-disclosure basis, if the enterprise is a new one without any ITR.
• The cost of certain items specified in 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.

Q. What are the criteria for calculation of Turnover?

Ans:- The following are the ways for calculation of Turnover-

• Exports of goods or services or both shall be excluded while calculating the turnover of any enterprise whether micro, small, or medium, for classification.
• Information as regards turnover and export turnover for an enterprise shall be linked to the Income Tax Act or the Central Goods and Services Act (CGST Act) and the GSTIN.
• The turnover-related figures of such enterprises that do not have PAN will be considered on a self-declaration basis for a period up to 31st March 2021 and thereafter, PAN and GSTIN shall be mandatory.

Q. How information are updated for any transition in classification/change in Udyam registration?

Ans:- The following are the process for information updation for transition in classification/change in Udam registration-

• An enterprise having a 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 a self-declaration basis.
• 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.
• Based on the information furnished or gathered from the Government’s sources including ITR or GST return, the classification of the enterprise will be updated.
• In the case of graduation (from a lower to a higher category) or reverse-graduation (sliding down to a lower category) of an enterprise, communication will be sent to the enterprise about the change in the status.
• 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 the expiry of one year from the close of the year of registration.
• 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.