{"id":23704,"date":"2021-01-08T14:46:19","date_gmt":"2021-01-08T09:16:19","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=23704"},"modified":"2024-07-02T18:00:10","modified_gmt":"2024-07-02T12:30:10","slug":"new-structure-of-msme-classification","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/new-structure-of-msme-classification\/","title":{"rendered":"An Outlook on the New Structure of MSME Classification"},"content":{"rendered":"\n<p class=\"has-drop-cap\">On the\n26th June 2020, MSMEs received the most-anticipated change from the government\non account of classification criteria. The change was made to widen the scope\nof classification so that more and more firms can join the MSME\u2019s ecosystem. <\/p>\n\n\n\n<p>The\nprevious structure of the MSME classification keeps the majority of the\ncompanies beyond its reach. The new amendment is expected to attract a\nconsiderable number of entities in the upcoming years. The changes were made by\nexpanding their existing bandwidth of parameters like Turnover and\nInvestment.&nbsp;Let\u2019s see how the new structure of MSME classification looks\nlike. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/new-structure-of-msme-classification\/#What_are_Amendments_made_to_the_Existing_Structure\" >What are Amendments made to the Existing Structure?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/new-structure-of-msme-classification\/#Inclination_towards_Atmanirbhar_Bharat_Abhiyan\" >Inclination towards Atmanirbhar Bharat Abhiyan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/new-structure-of-msme-classification\/#What_Are_The_Existing_Schemes_That_Are_Accessible_To_Entities_under_MSME_Registration\" >What Are The Existing Schemes That Are Accessible To Entities under MSME Registration? &nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/new-structure-of-msme-classification\/#Problem_Faced_By_MSMEs_in_Wake_of_COVID_19_Pandemic\" >Problem Faced By MSMEs in Wake of COVID 19 Pandemic<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/new-structure-of-msme-classification\/#Calculative_Means_for_Investment_in_Plant_equipment\" >Calculative Means for Investment in Plant &amp; equipment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/new-structure-of-msme-classification\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_Amendments_made_to_the_Existing_Structure\"><\/span>What are Amendments made to the Existing Structure?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The new\nstructure of MSME classification&nbsp;offer more flexibility in terms of\ncoverage. Compared to the past version, the new structure allows the new\nentities (medium enterprise, in particular) to join the MSME ecosystem. The\nsection below represents the new classification structure for MSMEs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">New Structure of MSME Classification<\/h3>\n\n\n\n<ul>\n<li>Any enterprise having investment up to Rs 1 crore &amp; annual revenue under Rs 5 crore will be regarded as \u201cMicro\u201c.<\/li>\n\n\n\n<li>Any enterprise having investment up to Rs 10 crore &amp; annual revenue up to Rs 50 crore will be regarded as \u201cSmall\u201c<\/li>\n\n\n\n<li>Any enterprise having investment up to Rs 20 crore &amp; annual revenue under Rs 100 crore will be regarded as \u201cMedium\u201c.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" width=\"985\" height=\"509\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/New-Structure-of-MSME-Classification.png\" alt=\"New Structure of MSME Classification\" class=\"wp-image-23707\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/New-Structure-of-MSME-Classification.png 985w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/New-Structure-of-MSME-Classification-300x155.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/New-Structure-of-MSME-Classification-768x397.png 768w\" sizes=\"(max-width: 985px) 100vw, 985px\" \/><\/figure><\/div>\n\n\n<h3 class=\"wp-block-heading\">Previous Structure\nof MSMEs Classification<\/h3>\n\n\n\n<p><strong><em>Manufacturing units: Based on investment in machinery and plant<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li>Micro enterprises \u2013 investment limit capped at 25 lakhs<\/li>\n\n\n\n<li>Small enterprises \u2013 Investment more than 25 lakhs rupees but not\nsurpassing 5 crore rupees.&nbsp;&nbsp;<\/li>\n\n\n\n<li>Medium enterprises- Investment more than 5 crore rupees but not\nsurpassing 10 crore rupees.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p><strong><em>Service sector: (Based on investment in equipment)<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li>Micro enterprises \u2013 Investment limit capped at ten lakh rupees<\/li>\n\n\n\n<li>Small enterprises \u2013 Investment more than Rs 10 Lakh but not\nsurpassing Rs 2 crore.&nbsp;<\/li>\n\n\n\n<li>Medium enterprises -Investment more than Rs 2 crore but not\nsurpassing Rs 5 crore.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Inclination_towards_Atmanirbhar_Bharat_Abhiyan\"><\/span>Inclination towards Atmanirbhar Bharat Abhiyan<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>With\nanticipation to aggressively counter the loss that occurred by the pandemic,\nthe government has rolled a dozen schemes under Atmanirbhar Bharat Abhiyan. The\naforesaid announcement came as a relief to distressed MSMEs who are expecting\nthe government to take relevant actions in the wake of the COVID 19\nPandemic.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Key Announcements that were made under \u201cAtmanirbhar Bharat Abhiyan\u201d<\/h3>\n\n\n\n<ul>\n<li>Rs 3 lakh crores stimulus package deployed to render collateral-free automated loans for the distressed MSMEs.&nbsp;<\/li>\n\n\n\n<li>A borrower having outstanding liabilities up to 25 crores and INR 100 Crore of turnover has access to this scheme.&nbsp;<\/li>\n\n\n\n<li>The loan tenor has been capped at 4 years along with a 12 months moratorium on principal repayment.&nbsp;<\/li>\n\n\n\n<li>The bandwidth of the interest rate has been kept under the range from 9.25% p.a to 9.75% p.a&nbsp;<\/li>\n\n\n\n<li>Meanwhile, private lenders like NBFCs would charge a 14% rate of interest.&nbsp;<\/li>\n\n\n\n<li>The credit guarantee scheme aims to render easy credit to distressed MSMEs to curb Non-Performing Assets.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Accordingly, looking way ahead in this context of the MSME has increased to many folds.&nbsp;The amendment is expected to bring more and more enterprises under the canopy of the MSME ecosystem; thus ensuring collective development of the sector.&nbsp;Earlier the entities under <a href=\"https:\/\/corpbiz.io\/msme-registration\"><strong>MSME registration<\/strong><\/a><strong> <\/strong>were classified into two categories namely manufacturing &amp; service entities. With the arrival of the latest amendment, the said categories shall be viewed under the common matrix. Additionally, they are classified as investment in plants and machinery or equipment and turnover.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_The_Existing_Schemes_That_Are_Accessible_To_Entities_under_MSME_Registration\"><\/span>What Are The Existing Schemes That Are Accessible To Entities under MSME Registration? &nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following are  the schemes accessible to the entities under MSME registration.<\/p>\n\n\n\n<ol>\n<li>Micro &amp; Small\nEnterprises Cluster Development Programme.<\/li>\n\n\n\n<li>MSME Technology Centres\n(TCs)<\/li>\n\n\n\n<li>Credit Guarantee Scheme\nfor Micro &amp; Small Enterprises.<\/li>\n\n\n\n<li>Credit Linked Capital\nSubsidy Component (CLCS &amp; TU Scheme)<\/li>\n\n\n\n<li>Interest Subvention\nScheme for MSMEs-2018<\/li>\n\n\n\n<li>Promotion of MSMEs in\nNER and Sikkim- a sub component of Central Sector Scheme \u201c Technology and\nEnterprise, Resource Center\u201d .<\/li>\n\n\n\n<li>Procurement and\nMarketing Support (PMS) scheme<\/li>\n\n\n\n<li>ZED Certification Scheme<\/li>\n\n\n\n<li>Lean Manufacturing\nCompetitiveness for MSMEs<\/li>\n\n\n\n<li>Design Clinic for Design Expertise to MSMEs<\/li>\n\n\n\n<li>Digital MSME<\/li>\n\n\n\n<li>Entrepreneurial &amp; Managerial Development of SMEs via\nIncubators<\/li>\n\n\n\n<li>Awareness on Intellectual Property Rights (IPR)<\/li>\n\n\n\n<li>ESDP Scheme<\/li>\n\n\n\n<li>Assistance to Training\nInstitutions (ATI) Scheme<\/li>\n\n\n\n<li>International Cooperation (IC) Scheme<\/li>\n\n\n\n<li>Science &amp; Technology<\/li>\n\n\n\n<li>Coir Industry Technology Upgradation Scheme<\/li>\n\n\n\n<li>Skill Upgradation and Mahila Coir Yojana<\/li>\n\n\n\n<li>Export Market Promotion<\/li>\n\n\n\n<li>Domestic Market Promotion<\/li>\n\n\n\n<li>Trade &amp; Industry Related Functional Support Services<\/li>\n\n\n\n<li>Welfare Measures<\/li>\n\n\n\n<li>Prime Minister\u2019s Employment Generation Programme (PMEGP)<\/li>\n\n\n\n<li>2nd Loan for up-gradation of the existing PMEGP \/ MUDRA\nunits<\/li>\n\n\n\n<li>MMDA<\/li>\n\n\n\n<li>ISEC<\/li>\n\n\n\n<li>Work-Shed Scheme for Khadi Artisans<\/li>\n\n\n\n<li>Strength-ening of Infrastructure of Existing Weak Khadi\nInstitutions and Assistance for Marketing Infrastructure<\/li>\n\n\n\n<li>Rojgar Yukt Gaon<\/li>\n\n\n\n<li>Honey Mission Programme \/ Beekeeping<\/li>\n\n\n\n<li>Mission Solar Charkha<\/li>\n\n\n\n<li>Scheme of Fund for Regeneration of Traditional Industries\n(SFURTI)<\/li>\n\n\n\n<li>A Scheme for Promotion of Innovation, Rural Industries and\nEntrepre-neurship (ASPIRE)<\/li>\n\n\n\n<li>Mahatma Gandhi Institute for Rural Industri-alization\n(MGIRI)<\/li>\n\n\n\n<li>National SC-ST Hub<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Problem_Faced_By_MSMEs_in_Wake_of_COVID_19_Pandemic\"><\/span>Problem Faced By MSMEs in Wake of COVID 19 Pandemic<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>Absence of timely &amp; adequate\nbanking finance<\/li>\n\n\n\n<li>Limited capital &amp;\nknowledge<\/li>\n\n\n\n<li>Non-availability of\nlatest generation technology<\/li>\n\n\n\n<li>Low production capacity<\/li>\n\n\n\n<li>Ineffective marketing\nstrategy<\/li>\n\n\n\n<li>Limitation\nofmodernizationand expansions<\/li>\n\n\n\n<li>Absence of skilled labour\nat affordable cost<\/li>\n\n\n\n<li>Follow up with government\nauthorities to solve issuesowing to lack of man power &amp; knowledge etc.<\/li>\n<\/ul>\n\n\n\n<p>Make sure to remember points in mind while considering the\ncriteria for MSME classification and composite investment as well as turnover.\nIf the enterprises cross the ceiling limit in their respective category as\ncontrasted with two criteria then it will automatically place into the next\ncategory. The enterprise position will not be compromised in the event if it\nmanages to satisfy the ceiling limit.&nbsp;<\/p>\n\n\n\n<p>All the entities with <strong>GSTIN<\/strong> listed against the one PAN number will be treated as one entity and the investment and turnover figures will be seen together for classification.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calculative_Means_for_Investment_in_Plant_equipment\"><\/span>Calculative Means for Investment in Plant &amp; equipment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It should be linked with the IT return of past years filed under\nIT Act, 1961 for Existing enterprises. For New Enterprises where no income tax\nreturn available be considered based on Self declaration of Promoter &amp; the\nsame shall end post 31st March of the first financial year with compulsory\nGSTIN &amp; PAN in possession.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>MSME is the major contributor to the Indian economy as it is\naccounted for 29% of the country\u2019s GDP. The majority of the employment is\ngenerated from this sector itself. It\u2019s not only helping in strengthening the\ncountry\u2019s GDP but also curbing the prevalent issues like unemployment. <\/p>\n\n\n\n<p>The announcement pertaining to new structure of MSME classification&nbsp;has paved down a roadmap of growth for the entities that are waiting to get some exposure to the government-related scheme. Talk to our expert at <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> helpdesk in case if you need some services pertaining to MSME registration or other government related license. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/policy-measures-that-can-uplift-the-msmes-sector-in-india\/\">\nAn Overview on Policy Measures That Can Uplift the MSMEs Sector in India\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On the 26th June 2020, MSMEs received the most-anticipated change from the government on account of classification criteria. The change was made to widen the scope of classification so that more and more firms can join the MSME\u2019s ecosystem. The previous structure of the MSME classification keeps the majority of the companies beyond its reach. [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":23711,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[176],"tags":[1406],"acf":{"service_id":"71"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":6753,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/23704"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=23704"}],"version-history":[{"count":19,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/23704\/revisions"}],"predecessor-version":[{"id":65125,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/23704\/revisions\/65125"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/23711"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=23704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=23704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=23704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}