MSME Udyam Registration

MSME Udyam Registration: All you need to know

The government of India started a new process for registration of MSME. The project got live on 1^st July 2020. The project has been named as MSME Udyam earlier it was known as Udyod Adhar. The best part of this new process is it is not only fully online and free of cost but completely based on self-declaration which means you don’t have to upload any documents as a proof. The Financial Ministry expressed confidence in the new process of MSME registration and said that it will set an example in terms of “Ease of Doing Business” not only in India, but globally as it will not only reduce transaction time and costs but entrepreneurs and enterprises can now completely focus on their core work to become globally competitive.

All you need to have is a valid Adhaar Number. For registering oneself under this MSME initiative, one has to visit www.udyamregistration.gov.in. We will come up with a stepwise guideline on how to fill up the form. Till then, let us elaborate on the new changes that are brought forward under the redefined MSME definitions. MSME means Micro, Small, and Medium Enterprises.

Let us start with the old and the new definitions.

Old and New definition of MSME

From the above table, it is clear that the definitions were made more favorable for the enterprises in terms of flexibility. Our Financial minister in her official statement stated that the definition has been changed in favor of MSMEs. She said that there has always been this fear even among successful MSMEs that if they outgrow the size of what has been defined as an MSME they will lose their entitled benefits.

Traditionally, MSMEs like to remain confined within the registered definition instead of growing and graduating to the next level. The revised definitions of MSMEs offer quite flexibility in terms of scale so it seems that they will not have to worry anymore about growing their size and can still avail benefits.

What she told is true, previously, most enterprises had a backlog of growing more because if they increase their scales of production, they will move to the next group and miss out on the benefits of the lower group. As we all know, the lowest strata gets the most benefit.

The new aforesaid definition removes the bifurcation of investment limits which were previously existent so, it is expected that a large number of service providers would be covered here.

It seems that the introduction of the procedure for filing the memorandum under the MSME Udyam Registration would be considered as a pre-requisite for availing benefit under various schemes so it is better to register your enterprise on this website.

Note that, if any provision for registration under MSME Act, 2006, is violated Section 27 of the Act, provides for a fine of up to one thousand rupees for first a conviction. It ranges from one thousand to ten thousand for second and subsequent convictions.

MSME Udyam Registration process with Aadhaar card

The process of registering an enterprise is made a thousand times simple and fast with this newly introduced procedure. To get your enterprise registered you have to follow this stepwise guide.

1. If you own an enterprise which comes under the definition of any of the above mentioned conditions then you should log in to the Udyam Registration Portal. You can do that by simply clicking here.

• Here you will get two options:
• For new entrepreneurs who are not registered yet as MSME.
• For those already having registration as EM-II or UAM.

As the headline suggests, you have to click on the first option if you are a new entrepreneur and you if you had a previous registration as EM-II or UAM then you have to click on the second option to re-register.

Registration for new entrepreneurs who are not registered yet as MSME

1. As soon as you click on “For new entrepreneurs who are not registered yet as MSME”, it will ask you to enter your Aadhaar number and your name. Please note that having a mobile linked Aadhaar card number is mandatory. If your Aadhaar number is not yet linked with your mobile, do it first.
2. After this, you have to validate the details by generating and confirming through an OTP (One Time Password).
3. When you do this, a Permanent identification number will be generated.
4. When you complete the registration, you will get an e-Certificate with a clearly mentioned permanent identification number.
5. After completion, enterprises will be able to file their income tax return or GST return in this portal.

Registration for entrepreneurs who already have an EM-II or UAM registration

1. When you click on “For those already having registration as EM-II or UAM”, unlike the previous process, it will only ask you to enter your Aadhaar number.
2. After this, you have to validate the details of your Aadhaar by generating and confirming it an OTP (One Time Password). It can be done in two ways: “OTP on email as filled in application” or “OTP on mobile as filled in application”. As the headers suggest, you have to select the option where you would like to get the OTP.
3. When you validate your Aadhaar with OTP, you will be showed your Permanent identification number.
4. You have to complete the registration by filling other necessary details. When you complete, you will get a MSME Udyam e-Certificate. Note that your permanent identification number will be clearly mentioned in the e-certificate.
5. After earning the certificate, the enterprise will be able to file its income tax return or GST return in this portal.

It must be noted that for a proprietorship firm, the registration should be done with the Aadhaar of the proprietor. For a Partnership firm, registration should be done with the Aadhaar of the managing partner. Aadhaar of Karta is needed for a HUF and authorized signatory is required for registration of a Company or LLP or Co-operative or Trust or Organization. In the case of the last option, PAN and GSTIN of the enterprise will also be required.

MSME Udyam Registration process without Aadhaar card

As we have already mentioned, the government portal allows registration with the help of an Aadhaar card only. In case of non availability of Aadhaar card, the person has to approach MSME-Development Institutes or District Industries Centers (Single Window Systems) with his Aadhaar enrolment identity slip or a copy of Aadhaar enrolment request. In case, he or she cannot even have these, then the person has to produce his or her bank pass book or voter identity card or passport or driving license and the Single Window Systems will facilitate the process. In short, this process will lead you to getting an Aadhaar card and you have to do your registration after you get it. So we would recommend you to apply for an Aadhaar card if you don’t yet have an Aadhaar card.

Calculation of Investment in Plant, Machinery and Equipment

To determine whether the enterprise falls within the limits of MSME and under which category, a thorough calculation of investment in Plant, Machinery and Equipment, and annual turnover is necessary. It must be noted that “Plant, Machinery and Equipment” comes with the same meaning as defined under Income Tax Rules, 1962. This does not include land, building, furniture and fittings. The MSME guidelines also clearly states that it shall not include items mentioned in Explanation 1 of Section 7(1) of MSME Act 2006. For your benefit, we have listed out the items for you.

Items excluded from calculation of Investment in Plant, Machinery and Equipment

1. Equipment like tools, jigs, molds and spare parts for maintenance and cost of consumer stores.
2. Cost of plant and machinery installation.
3. Research and development equipment.
4. Pollution control equipment.
5. Power generation set and extra transformer installed by enterprise.
6. Bank charges.
7. Service charges paid to National Small Industrial Corporation or State Small Industrial Corporation.
8. Procurement or installation of cables, electrical control panels, mini circuit breakers, oil circuit breakers, wiring, bus bars used for providing electrical power to the plant and machinery.
9. Gas producer plant.
10. Transportation charges for indigenous machinery from place of manufacture till site of enterprise.
11. Charges paid for technical knowhow for the erection of plant and machinery.
12. Storage tanks which stores raw materials and FG only and are not linked with the manufacturing process.
13. Fire fighting equipment. 

Apart from this, all units with Goods and Services Tax Identification Number (GSTIN) listed against the same Permanent Account Number (PAN) will be treated as one enterprise and investment figures of all entities will be taken together. In simple, it means, only the aggregate values will be considered for deciding the category whether the enterprise is a micro or a small or a medium enterprise.

For old enterprises, this “calculation of investment in plant and machinery or equipment” part will be linked to the Income Tax Return (ITR) of the previous years. For new enterprises where no prior ITR is available, the investment will be based on self-declaration of the promoter of the enterprise. A new enterprise without any existing ITR has to quote the purchase (invoice) value of a plant and machinery or equipment shall be taken into account excluding Goods and Services Tax (GST).

Similarly, while calculating turnover, all units with same the GSTIN and PAN shall be treated as one enterprise and turnover figures all entities will be taken together. It is declared that the figures of enterprise which do not have a PAN will be considered on self-declaration till 31st March 2021 and thereafter, PAN and GSTIN will be mandatory for an enterprise.

Grievance and Complaint Cell

MSME Champions Control Rooms functioning in various MSME Development Institutes along with District Industries Centers in their respective districts will work as a Single Window Systems in facilitating the MSME registration process. You can share your grievance and raise your complaint directly to the General Manager of the District Industries Centre. He will then forward the matter to the concerned department. Bottom of FormTop of Form

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