The union cabinet approved the modalities and road map for the micro, small and medium enterprise on the 1st of june ,2020 india is aiming to take the next big leap. The initiative to skill india effort directed towards economic infrastructural changes has ramped up the micro entrepreneurship model and boosted start up culture. The young indian entrepreneur will require knowledgeable worker and skilled technical staff who are flexible and analytical and who can be the driving force for gaining market share. Micro, small and medium enterprise make a substantial contribution to the indian economy in terms of gross domestic product but also to exports and employment generation.
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In this article we have tried to throw light on the following.
Secondly the definition is that of micro, small and medium enterprise.
Thirdly the updated classification of micro, small, and medium enterprise.
Fourthly the step is to calculate the investment.
Fifthly the step is to calculate the turnover.
Sixthly the composite investment and turnover requirements.
Seventhly the registration procedure.
Eightly the step is to register an existing business.
Ninthly the registration benefit.
Tenthly services offered on udyam portal.
As per the notification of micro, small and medium enterprise dated 26th of june, 2020 udyam registration is the new process of micro, small and medium enterprise registration launched by the ministry of micro, small and medium enterprise effective from 1st of july, 2020.
Secondly what does micro, small and medium enterprise mean?
According to the micro, small and medium enterprise development act of 2006 enterprise are divided into two categories. Manufacturing enterprise engaged in the manufacturing and production of goods in any industry and service enterprise engaged in providing and rendering service.
Thirdly the step to calculate the investment.
The calculation of investment in plant and machinery will be linked to the income tax return of the previous year filed under the income tax act 1961.
In case of a new enterprise where no prior income tax return is available the investment will be based on a self declaration by the enterprise promoter and such relaxation shall come to an end after the 31st of march of the financial year in which it files its first income tax return.
The expression plant and machinery 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 rules 1961 and shall include all tangible assets.
The purchase value of a plant and machinery, whether purchased first hand and second hand, shall be taken into account excluding goods and services tax on self disclosure basis, if the enterprise is a new one without any income tax return.
The cost of certain items specified in the explanation one to sub section one of section seven of the act will not be taken into account when determining the amount of investment in plant and machinery.
Fourthly the step to calculate the turnover.
Exports of goods and service shall be excluded while calculating the turnover of any enterprise whether micro, small and medium, for the purpose of classification.
Information about an enterprise turnover and exports turnover must be connected to its revenue tax act as well as the goods and service tax identity number and the central goods and service act.
For the period up to 31st of march, 2021 the turnover related numbers of such enterprise that do not have a permanent account number will be considered on a self declaration basis after which a permanent account number and a goods services tax identity number would be required.
Fifthly composite criteria of investment and turnover for classification.
A composite criterion of investment and turnover shall apply for the classification of an enterprise as micro, small and medium.
If an enterprise exceeds the ceiling restrictions set for its current category in either of the two investment required for its turnover it will cease to exist in that category and be put in the next higher category but no firm will be placed in the lower category unless it falls below the investment and turnover ceiling restrictions stipulated for its current category.
All units with good and services tax identification number listed against the same permanent account number shall be collectively treated as one enterprise and the turnover for all of such entities shall be seen together only the total data will be used to determine whether a company is classified as a micro, small and medium enterprise.
Sixthly the registration procedure.
The registration process on the udyam registration site is paperless and requires no filing costs.
The aadhaar number shall be of the proprietor in the case of a sole proprietorship enterprise the managing partner in the case of a partnership firm and the karta in the case of a hindu undivided family.
In the case of a company and a limited liability partnership and a cooperative society and a society and trust, the organization and its authorized signatory shall provide its goods services tax identification number and permanent account number along with its aadhaar number.
If a company has been properly registered as an udyam with a permanent account number any information gap from previous year when it did not have a permanent account number must be filled out on a self declaration basis.
No enterprise shall file for more than one udyam registration for any number of activity including manufacturing and service that may be added in one udyam registration.
On registration an enterprise will be assigned a permanent identity number to be known as udyam registration number.
An electronic certificate namely udyam registration certificate shall be issued on completion of the registration process.
Seventhly the step is to register the present enterprise.
On and after 1st of july, 2020 all existing enterprise registered under the entrepreneur memorandum part two and the udyog aadhaar memorandum must re register on the udyam registration site.
All enterprise that were registered before the 30th of june, 2020 will be reclassified as a result of this announcement.
Existing enterprise that was registered before the 30th of june, 2020, will only be valid until 31st of march, 2021.
Under udyam registration an enterprise must be registered with any other institution under the ministry of micro, small, and medium enterprise.
Eightly the updation of information and transition period in classification.
An enterprise with an udyam registration number must update its information including the details of its income tax return online through the udyam registration site and the goods services tax return for the previous financial year and such other additional information as may be required on self declaration basis.
If the essential information is not updated within the time frame given in the online udyam registration portal the enterprise status will be suspended.
Based on the information furnished and gathered from government sources including income tax return and a solid service tax return the enterprise classification will be changed.
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In the event of an enterprise graduation and reverse graduation a notification of the change in status will be given to the company.
In case of an upward change in terms of investment in plant and machinery reclassification an enterprise will keep its current status for a period of one year after the end of the registration year.
In the event of an enterprise reverse graduation whether as a result of reclassification and actual changes in investment plant and machinery the enterprise is registered under the act and not the enterprise will continue in its current category until the end of the fiscal year and it will be eligible for the new status only with effect from 1st of april of the financial year following the year in which such change took place.
The government has made every effort to make india atmanirbhar by providing this micro, small and medium enterprise udyam platform by not only redefining micro, small and medium enterprise criteria but have also launched various schemes and service which will give a thrust to enterprise of small and medium entrepreneur. The government vision of atmanirbhar bharat is not only to take care of our own country need by locally produced goods and services provided but also to increase demand for our goods and services by improving the standard of our goods produced and services provided in the global market.