{"id":50380,"date":"2022-10-28T15:32:43","date_gmt":"2022-10-28T10:02:43","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=50380"},"modified":"2022-10-28T15:32:44","modified_gmt":"2022-10-28T10:02:44","slug":"momsme-amendment-notification-regarding-criteria-for-being-an-msme","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/momsme-amendment-notification-regarding-criteria-for-being-an-msme\/","title":{"rendered":"MoMSME Amendment Notification Regarding Criteria for Being an MSME"},"content":{"rendered":"\n<p>On\nOctober 18, 2022, the Ministry of Micro, Small &amp; Medium Enterprises\n(MoMSME) issued an amendment to a notification dated June 2020, which specifies\ncertain criteria for classifying an enterprise as an MSME and various forms\n&amp; procedures for filing the memorandum. The amendment notification\nregarding criteria for being an MSME stated that in case of an upward change or\nalteration in terms of investment in plant and machinery\/equipment or turnover\nor both &amp; consequent reclassification, an enterprise should continue to\navail of non-tax benefits of the category (Micro\/Small\/Medium) it was in before\nthe reclassification for 3 years from the date of such upward. In this blog, we\nwill discuss the notification regarding the Criteria for Being an MSME.<\/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\/momsme-amendment-notification-regarding-criteria-for-being-an-msme\/#Classification_of_Enterprise\" >Classification\nof Enterprise<\/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\/momsme-amendment-notification-regarding-criteria-for-being-an-msme\/#Composition_of_Investment_Turnover_for_Classification_of_Enterprises_%E2%80%93_Criteria_for_being_an_MSME\" >Composition of\nInvestment &amp; Turnover for Classification of Enterprises &#8211; Criteria for\nbeing an MSME<\/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\/momsme-amendment-notification-regarding-criteria-for-being-an-msme\/#Calculation_of_Investment_in_Plant_MachineryEquipment_%E2%80%93_Criteria_for_being_an_MSME\" >Calculation of\nInvestment in Plant &amp; Machinery\/Equipment &#8211; Criteria for being an MSME<\/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\/momsme-amendment-notification-regarding-criteria-for-being-an-msme\/#Updation_of_Details_Transition_Period_in_Classification_of_Enterprise_as_per_the_New_Amendment_Regarding_the_Criteria_for_being_an_MSME\" >Updation of\nDetails &amp; Transition Period in Classification of Enterprise as per the New\nAmendment Regarding the Criteria for being an MSME<\/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\/momsme-amendment-notification-regarding-criteria-for-being-an-msme\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Classification_of_Enterprise\"><\/span>Classification\nof Enterprise<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An\nenterprise shall be categorised as a Micro\/Small\/Medium enterprise on the basis\nof the following criteria:<\/p>\n\n\n\n<ol><li>A Small-enterprise, where the\ninvestment in plant &amp; machinery\/equipment doesn\u2019t exceed Rs. 10 crores and\nturnover doesn\u2019t exceed Rs. 50 crores;<\/li><li>A Micro-enterprise, where the\ninvestment in plant &amp; machinery\/equipment doesn&#8217;t exceed Rs. 1 crore &amp;\nturnover doesn\u2019t exceed Rs. 5 crores;<\/li><li>A Medium-enterprise, where the\ninvestment in plant &amp; machinery\/equipment doesn&#8217;t exceed Rs. 50 crores\n&amp; turnover doesn\u2019t exceed Rs. 250 crores.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Composition_of_Investment_Turnover_for_Classification_of_Enterprises_%E2%80%93_Criteria_for_being_an_MSME\"><\/span>Composition of\nInvestment &amp; Turnover for Classification of Enterprises &#8211; Criteria for\nbeing an MSME<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nis the composition of investment and turnover of classification of enterprises:<\/p>\n\n\n\n<ul><li>A composite criterion of\ninvestment &amp; turnover shall apply for the categorisation of an Enterprise\nas Micro\/Small\/Medium;<\/li><li>All units with GSTIN listed\nagainst the same PAN (Permanent Account Number) shall be collectively treated\nas one enterprise &amp; the turnover &amp; investment figures for all of such\nentities or companies shall be seen together &amp; only the aggregate value\nwill be considered for deciding the category as MSME;<\/li><li>If an enterprise crosses the\nceiling or upper limits specified for its current category in either of 2\ncriteria of investment\/turnover, it will cease to exist in that category &amp;\nbe placed in the next higher category, but no enterprise or company shall be\nplaced in the lower category unless it goes below the upper limits specified for\nits current category in both the criteria of investment and turnover.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calculation_of_Investment_in_Plant_MachineryEquipment_%E2%80%93_Criteria_for_being_an_MSME\"><\/span>Calculation of\nInvestment in Plant &amp; Machinery\/Equipment &#8211; Criteria for being an MSME<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li>In the case of a new enterprise,\nwhere no prior ITR (Income Tax Return) is available, the investment will depend\non the enterprise promoter&#8217;s self-declaration &amp; such relaxation shall end\nafter the 31<sup>st<\/sup> March of the F.Y. (Financial Year) in which it files\nits 1<sup>st<\/sup> Income Tax Return;<\/li><li>The purchase (invoice) value of a\nplant &amp; machinery\/equipment, whether purchased 1<sup>st<\/sup> hand or 2<sup>nd<\/sup>\nhand, shall be taken into account, excluding <strong><em>GST<\/em><\/strong>, on a self-disclosure\nbasis if the enterprise or company is a new one without any ITR;<\/li><li>The expression Plant &amp;\nMachinery\/Equipment of the enterprise shall have a similar meaning as assigned\nto the plant &amp; machinery or equipment in the <strong><em>Income Tax Rules (IT Rules), 1962,\n<\/em><\/strong>framed under the IT Act, 1961 &amp; shall include all vital tangible\nassets (other than land &amp; building furniture &amp; fittings);<\/li><li>The cost of certain products\nspecified in <strong><em>Explanation I to sub-section (1) (Section 7 of the Act<\/em><\/strong>) shall\nbe expelled from the calculation of investment amount in Plant &amp; Machinery;<\/li><li>The calculation of investment in\nPlant &amp; Machinery\/equipment will be associated with the ITR of the previous\nor last year filed under the IT Act, 1961.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\">Calculation\nof Turnover<\/h3>\n\n\n\n<ol><li>Exports of goods\/services or both\nshall be excluded while estimating the turnover of any enterprise or business,\nwhether Micro\/Small\/Medium;<\/li><li>Details as regard turnover &amp;\nexports turnover for an enterprise shall be associated linked to the IT Act or\nthe CGST Act and the GSTIN;<\/li><li>The turnover-related figures of\nsuch enterprises which don&#8217;t have PAN will be deemed on a self-declaration\nbasis for a period of up to 31<sup>st<\/sup> Mar 2021 and thereafter, GSTIN and\nPan shall be mandatory.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Updation_of_Details_Transition_Period_in_Classification_of_Enterprise_as_per_the_New_Amendment_Regarding_the_Criteria_for_being_an_MSME\"><\/span>Updation of\nDetails &amp; Transition Period in Classification of Enterprise as per the New\nAmendment Regarding the Criteria for being an MSME<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>An enterprise having <strong>URN or Udyam Registration Number <\/strong>shall\nupdate its details online on the <strong>Udyam Registration website<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/udyamregistration.gov.in\/\"><strong>[1]<\/strong><\/a><\/sup>, including the details\nof the GST Return &amp; ITR for the previous Financial Year &amp; other\nadditional details as may be required, on self-declaration basis;<\/li><li>Failure to update the details\nwithin the stipulated period will render the enterprise responsible for\nsuspension of its status;<\/li><li>Based on the details provided or\ncollected from the Government&#8217;s sources comprising ITR or GST Return, the\ncategorisation of the enterprise will be updated;<\/li><li>In case of graduation ( from\nlower category to higher category) or reverse graduation of an enterprise, a\ncommunication will be sent to the enterprise regarding the change in the\nstatus;<\/li><li><strong><em>\u201cIn case of an upward change or alteration\nin terms of investment in plant &amp; machinery or equipmen\/turnover or both,\n&amp; consequent reclassification, an enterprise shall continue to avail of\nnon-tax advantages of the category (Micro\/Small\/Medium) it was in before the\nreclassification for 3 years from the date of such upward\u201d. <\/em><\/strong>In\nthe previous notification issued by MoMSME in 2020, it was &#8220;in case of an\nupward change or alteration in terms of investment in plant &amp; machinery or\nequipment or turnover\/both, &amp; consequent reclassification, an enterprise\nwill maintain its usual status till <strong><em>expiry of 1 year from the closure of the\nyear of registration<\/em><\/strong>\u201d.<\/li><li>In case of reverse graduation of\nan enterprise, whether as an outcome of reclassification or due to actual\nchanges in investment in plant &amp; machinery\/equipment or turnover or both\n&amp; whether the enterprise or company is registered under the Act\/not, the\nenterprise or company will continue in its current category only with effect\nfrom 1<sup>st<\/sup> April of the F.Y. (Financial Year).<\/li><\/ul>\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>The MoMSME has issued the notification regarding the criteria for being an <strong><a class=\"text-primary\" href=\"https:\/\/corpbiz.io\/msme-registration\">MSME<\/a><\/strong>, which specifies certain criteria for classifying an enterprise as MSME and various forms &amp; procedures for filing the memorandum.<\/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\/essentials-of-msme-registration\/\">What are the Essentials of MSME Registration?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On October 18, 2022, the Ministry of Micro, Small &amp; Medium Enterprises (MoMSME) issued an amendment to a notification dated June 2020, which specifies certain criteria for classifying an enterprise as an MSME and various forms &amp; procedures for filing the memorandum. The amendment notification regarding criteria for being an MSME stated that in case [&hellip;]<\/p>\n","protected":false},"author":35,"featured_media":50381,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[176],"tags":[2811],"acf":{"service_id":"71"},"authorName":"Karan Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/processed-1-150x150.jpeg","authorDescription":"A legal writing enthusiast, a wanderer, and a zealous reader. After gaining a lot of knowledge about the diverse legal topics and developing research skills, Karan joined the league of legal content writers to deliver quality-rich blogs.","postViews":2361,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/50380"}],"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\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=50380"}],"version-history":[{"count":2,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/50380\/revisions"}],"predecessor-version":[{"id":50383,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/50380\/revisions\/50383"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/50381"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=50380"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=50380"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=50380"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}