Udyam Scheme For Small Business Growth By indian Government
Udyam Scheme an initiative by Indian Government to Promote micro, small and medium enterprise and boost their business which will ultimately boost the Indian Economy.
An enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria:
(i) a 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;
(ii) a 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
(iii) a 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.
- What are the benefits of Udyam Scheme registration?
- Interest rate reduction for loans
- Collateral free loans from banks
- Protection against delayed payments
- Beneficial reservation policies in the manufacturing/production sector
- Ease of obtaining licenses, registrations, and approvals.
- Eligibility for CLCSS (credit linked capital subsidy scheme)
- International trade fair special consideration
- Government security deposit waiver (Useful while participating tenders)
- Electricity bills concession
- Stamp duty and registration fees waiver
- ISO certification fees reimbursement
- Direct tax laws rules exemption
- Interest rate exemption on OD
- NSIC performance and credit rating fees subsidy
- Patent registration subsidy
- Bar code registration subsidy
- Industrial Promotion Subsidy (IPS) Subsidy Eligibility
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Whether there is any change in definition of MSMEs?
Yes, according to new definition classification will be as follows:
Particular | Maximum Investment in Plant and Machinery or Equipment | Maximum Turnover |
Micro Enterprise | Rs. 1 Crore | Rs. 5 Crore |
Small Enterprise | Rs. 10 Crore | Rs. 50 Crore |
Medium Enterprise | Rs. 50 Crore | Rs. 250 Crore |
Both the conditions are cumulative; therefore, if entity fulfils one condition and other condition is not fulfilled then in that case it will be shifted to higher category.
- How this turnover will be calculated whether it will be on PAN basis or entity wise?
Turnover will be seen on totality basis and not on individual basis i.e. Only the aggregate values will be considered for deciding the category as micro, small or medium enterprise. Further 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.
- How to calculate investment in plant and machinery and Turnover for MSME’s?
Investment:
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 determine the investment amount.
Turnover:
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 determine the investment amount.
- Whether there is any specific inclusion or exclusion while calculating Investment?
Investment value shall be comprising of:
Investment in plant and machinery (excluding GST) + All Tangible assets but not including amount of Land, building, furniture and fixture.
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Whether there is any new registration process for MSMEs?
As declared by the Union Ministry of Micro, Small and Medium Enterprises (MSME), vide the Notification Dated 26th June, 2020, the new process of Classification and Registration of enterprises is starting from 1st July, 2020. An enterprise for this purpose will be known as Udyam and its Registration Process will be known as “Udyam Registration“.
- What is process of this registration and what are the documents that are required for this registration?
The registration process will be an online process, and which is in very simplified format requiring details such as GSTN, Aadhar No., PAN No. and other information. Generally, it will not require any document except of basic documents as government has determined that this will be based on self-certificates and will not require any other documents.
- What are the steps for process of registration for new entity and entity which is already registered under MSME?
The Following simple 3 step procedure is to be followed:
- An MSME needs to apply for online Udyam Registration in Udyam Registration Portal.
- On successful submission of application, the enterprise will be assigned ‘Udyam Registration Number’ (i.e., permanent identity number).
- On completion of the registration process, the enterprise shall be issued a ‘Udyam Registration Certificate’.
For Existing Enterprises:
- 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 newly registered enterprises till 30th June, 2020, shall be reclassified in accordance with this notification.
- 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.
- An enterprise registered with any other organisation under the Ministry of Micro, Small and Medium Enterprises shall register itself under Udyam Registration.
- Whether there will be any registration charges?
There be no fees for registration; i.e. this registration process will be free.
- Whether there will be any charges for providing wrong self-declarations?
Penalty for misrepresents or attempts to suppress the self-declared facts and figures shall be punishable:
- In case of 1st Conviction, with fine which may extend to Rs. 1000/- and
- In case of 2nd or subsequent Conviction with fine which shall not be less than Rs. 1000/- but may extend to Rs. 10,000.