WHAT IS MSME?
Micro, Small, and Medium-Sized Enterprises are referred to as MSME Registration .The MSME sector in India, which contributes for 30% of the country’s GDP, serves as the economic engine of the country. It is responsible for 95% of all industrial units in India, 50% of all exports from India, and 45% of all industrial jobs. According to information on the MSME industries’ website, about 6000 different types of items are produced there. Prior to establishment, these MSMEs must register themselves. The registration enables the businesses to receive financial assistance and advantages. Bank loans with low interest rates and no collateral as well as government support for MSME growth are some of the financial benefits and aids available. Starting from July 1st, 2020, the Indian government altered the registration process for MSME. It will henceforth be referred to as “UDYAM REGISTRATION,” with the Hindi word for the term meaning “enterprises.” To receive the government-provided benefits, the MSME must go through “UDYAM REGISTRATION” on their own.
WHAT ARE SMES (SMALL,MEDIUM,ENTERPRISE )?
In accordance with the Micro, Small and Medium firms Development (MSMED) Act of 2006, the government established the Micro, Small and Medium Enterprises (MSME), also referred to as Small-scale firms, as a set-up of the industrial structure. Production, manufacture, preservation, and processing of goods and commodities make up the bulk of these businesses’ activities. One of the most significant economic sectors in India is MSME, which has greatly influenced the growth of the socioeconomic structure and played a significant part in the expansion of the Indian economy. Non-skilled and semi-skilled workers in the rural sector have been given jobs by the MSME sector, which has also contributed to the growth of India’s semi-rural and rural areas. Prior to 2018, MSMEs were classified based on the amount of money they invested annually, but the government later announced that it will redefine the term to include all businesses, whether they operate in the manufacturing or service sectors, regardless of their annual revenue. The main problem that the MSME sector generally suffers is an inadequate level of financial support. The firms must go through the new registration process in order to receive financial assistance such as collateral-security-free loans, low-interest bank loans, and financial help.
CLASSIFICATION OF BUSINESS:-
The Micro, Small and Medium Enterprises Development Act of 2006 (MSME Act), which was in effect before the change, governed the classification of MSMEs. The two criteria used to categorize these businesses were their investment in plant or equipment and their annual revenue. The manufacturing and service roles in which MSME are involved were also used to classify them. Later, as part of the Atma Nirbhar Bharat Yojana, the Ministry of Micro, Small, and Medium Enterprises updated the MSME categorization by incorporating a combined provision consisting of annual turnover and investment in plant and machinery in its notice dated June 1, 2020. This classification does not distinguish between the manufacturing sector and the service sector.
Based on the following criteria, the enterprises have been reclassified:
➨Micro-enterprises are those where the investment in machinery and equipment is less than one crore rupees and the turnover is less than five crore rupees.
➨A business is considered a small enterprise if its investment in machinery and equipment is less than ten crore rupees and its annual revenue is less than fifty crore rupees.
➨When a firm invests no more than 50 crore rupees in machinery and equipment and has a turnover of no more than 250 crore rupees, the business is considered to be of medium size.
PENALTIES FOR MSME REGISTRATION :-
➨According to Section 27 of the Micro, Small and Medium Enterprises Development Act of 2016, those who willfully withhold or intentionally misrepresent the self-declared facts that are legally required to be provided during the Udyam registration or update process shall be subject to a fine that may reach one thousand rupees upon first conviction. Following a conviction, there will be a minimum fine of 1,000 rupees and a maximum fine of 10,000 rupees.
➨A punishment of at least ten thousand rupees will be imposed on the firms if it is determined that they have violated Section 22 of the MSME Development Act, 2016, which requires that the audit details be given.
For more read : https://udyamonlineregistration.org/blog/msme-registration
