“The Man who follows the crowd will usually get no further than crowd. The man who walks alone is likely to find himself in places no one has ever been before”.
Every big business house or an organisation was once a Single person Dream, the dream which was cultivated with the hard work and sheer dedication and passion to achieve something big which once rooted by One Sole Entrepreneur. The brand and identity might seem tiny at the beginning but with years of commitment that one small bold initiative to walk alone attracts the crowd and you become a Job Provider rather than a Job Seeker.
To become Your Own Boss, government of India under the contemporary leadership of Prime Minister Shri Narendra Modi has brought a scheme “UDYAM AADHAR” and/or MSME Registration” for such young and dynamic entrepreneurs who has the potential of contributing and lifting the Indian economy.
Online Registration of MSME is highly important as it enables the enterprises to avail benefits from various government initiated schemes. Under the regime of “Atmanirbhar Bharat” the Finance Minister Smt. Nirmala Sitharaman announced revised definition for Micro, Small and Medium enterprises (MSMEs) where the investment limits have been raised.
On and from first of July 2020 the Udyog Aadhar /MSME Registration underwent a change with few modifications and up gradation to be now called as Udyam Registration. The criteria of investment and turnover have also been changed for all the three categories of MSME that is micro, small and medium enterprises.
Earlier MSMEs were classified into two categories i.e manufacturing and service enterprises but now both the business types are treated at par just like the uniform tax structure under Goods and Service Tax (GST). It is to be clarified that the new classification criteria does not apply to trading companies.
Further under the new regime, now business seeks registration under MSME/Udyam Aadhar are now required to register their business under GST also as both the departments are now get inter linked with each other and to have MSME Certificate one has to take GST registration also.
As per new guidelines enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria: –
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;
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.
Process of Registration under MSME:
For New Enterprise
MSME registration is an online process where any person or business entity can register his business on basis of very fundamental documents with basic business features and information. It is a self-declarative process with no requirement to upload documents, papers, certificates or proof etc.
Documents Required for MSME/Udyam Registration
- For Sole Proprietorship- It is mandatory for a person to have Aadhaar Number for Udaym Registration. The Aadhaar number shall be of the proprietor in the case of a proprietorship firm and of the managing partner in the case of a partnership firm and of a Karta in the case of a Hindu Undivided Family (HUF).
- For Partnership/LLP/Private Limited Companies– In case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust, the organisation or its authorised signatory shall provide its GSTIN and PAN along with its Aadhaar number.
It is to be noted that enterprise cannot file more than one Udyam Registration. Any number of activities including manufacturing or service or both may be specified or added in one Udyam Registration.
- On registration, an enterprise will be assigned a permanent identity number to be known as Udyam Registration Number. An e-certificate shall be issued on completion of the registration process which will also be known as Udyam Registration Certificate.
Process of Re- registration under MSME: In case of existing Enterprise
- All existing registered under Udhyog Aadhar Memorandum will have to register themselves again on the Udyam Registration portal on or after 1 July, 2020.
- All enterprises registered till 30 June 2020, shall be re-classified in accordance with these new guidelines.
- The existing enterprises registered prior to 30 June 2020 shall continue to be valid only for a period up to the 31 March 2021 only.
Benefits of Udyam Aadhar/MSME Registration
- Availing Bank Loans under
various government schemes;
- Subsidy in government fee while applying for Patent and Trademark Registration;
- Low interest rate on loans;
- Protection against delayed payments from corporate sector;
- Import Subsidies on fully automatic machineries;
- Credit linked capital subsidies ;
- Tender preferences to MSME sector etc.
Tax Implications
The new MSME classification will be linked with the income tax return (ITR) and the Goods and Services Tax Identification Number (GSTIN) of the business. The definition of plant and machinery or equipment will be now considered as per the Income Tax Rules, 1962 under the Income Tax Act, 1961. In case of a new enterprise, where no prior tax return has been filed the investment will be based on the self-declaration of the promoter for its first financial year only.
Calculation of Turnover in case of more than one Enterprise
It is important to note that if more than one enterprise has listed their GSTIN against the same Permanent Account Number then all such enterprises will be treated as one unit when calculating the turnover and investment for MSME eligibility assessment and tax purposes.
Exclusion from turnover calculation in case of Exports
The export of goods, services, or both shall be excluded when calculating the MSME’s turnover. Further, the turnover and export earnings of the enterprise will be linked to the Income Tax Act or the Central Goods and Services Act, 2017 and the GSTIN.
Annual compliances
The Udyam Registration Number (URN) linked enterprise has to update its information at the end of each financial year on the Udyam Registration Portal. The information shall include details of the Income Tax Return and GST Returns filed for the previous financial year and other additional details on a self-declaration basis. If the enterprise fails to update this information within the prescribed period then their status as an MSME will get suspended.
To get register your business under Udyam/MSME registration and to avail all the above stated benefits of MSME kindly visit http://www.aapkaconsultant.com/ For more details on Sole Proprietorship Registration kindly click- http://www.aapkaconsultant.com/sole-proprietorship
