The enterprise which are engaged in the manufacture and production processing as well as preservation of goods and the enterprise which are engaged in providing and rendering of service up to a specified limit are known as micro, small and medium enterprise as per their respective limits as given below.
It mean only those enterprise are considered eligible for udyam registration which are either in manufacturing and production as well as processing and preservation of goods as well as in the providing and rendering of service. In other words, the enterprises which are engaging only in trading that is buying and selling importing as well as exporting of products are ineligible for udyam registration.
Suggested read udyog aadhaar print download.
The basics of udyam registration.
In exercise of the power conferred by sub section one read with sub section nine of section seven and sub section two read with sub section three of section eight of the micro, small and medium enterprise development act, 2006, hereinafter referred to as the said act and in supersession of the notification of the government of india in the ministry of micro, small and medium enterprise number s.o.1702 and dated the 1st of june as well as 2020 and s.o. 2052 as well as dated the 30th of june, 2017 and s.o. 3322 as well as dated the 1st of november, 2013 and s.o. 1722 as well as dated the 5th of october, 2006 published in the gazette of india extraordinary part two and section three as well as sub section two and except as respect things done and omitted to be done before such supersession the central government after obtaining the recommendation of the advisory committee in this behalf hereby notifies certain criteria for classifying the enterprise as micro, small and medium enterprise and specify the form and procedure for filing the memorandum.
The union ministry of micro, small and medium enterprise had made the announcement regarding the new process of classification and registration of micro, small and medium enterprise which was launched on the 1st of july, 2020 under the name of udyam registration through a notification on 26th of june. The micro, small and medium enterprise ministry launched a new portal for udyam registration https://www.udyamregistration.gov.in. The gateway will assist the entrepreneur in learning what they need to know and doing what they need to do. Following the suggestion of the advisory council in this regard the central government announces certain criteria for classifying the enterprise as micro, small and medium enterprise as mentioned in the above table.
Basis of calculation.
Plant and machinery purchase.
The investment in plant and machinery will be calculated using the previous year income tax return filed under the income tax act of 1961.
In the case of a new enterprise with no prior income tax return the investment will be made based on self declaration of the promoter of the enterprise and such relaxation shall end after the last day of the fiscal year in which it files its first income tax return which is 31st of march.
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 act 1961 and shall include all tangible assets.
The purchasing price of a plant and machinery whether new as well as used must be taken into consideration excluding good and service tax on self disclosure basis if the enterprise is a new one without any income tax return.
The cost of certain goods listed in explanation one to sub section one of section seven of the act are excluded from the computation of plant and machinery investment.
Exports of goods or services and both shall be excluded while calculating the turnover for the purpose of classification any enterprise whether micro, small and medium is considered.
Information as regard turnover as well as export turnover for an enterprise shall be linked to the income tax act and the central good and service act as well as the good service tax identification number.
The turnover related figures of such enterprise which do not have permanent account number will be considered on self declaration basis for a period up to 31st of march, 2021 and thereafter permanent account number and goods services tax identification number shall be mandatory.
For classification we used a combination of investment and turnover factors.
For the classification of an enterprise as micro, small and medium a composite criterion of investment and turnover will be used.
If an enterprise cross the ceiling limit specified for its present category in either of the two criteria of investment and 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 goods and services tax identification number listed against the same permanent account number shall be collectively all of these entities will be classified as one business and their revenue and investment data will be compared and only the aggregate values will be considered for deciding the category as micro, small and medium enterprise.
The advantages of becoming an udyam.
Registration with udyam makes it easier to obtain government contract.
Because the interest rate is very low up to 1.5 percent lower than normal loan and bank loan become cheaper as a result of the udyam.
Udyam is eligible for a variety of tax incentives.
Becomes easy to get license as well as approval and registration irrespective of government licenses and certification are given higher priority to the field of business registered under udyam.
They can simply get a loan with a lower interest rate.
Registered udyam have access to tariffs as well as taxes and capital subsidy.
Once registered the cost of obtaining a patent as well as the cost of establishing an industry is reduced due to the numerous rebates and concessions available.
Also read udyog aadhaar print.
The procedure and documentation for obtaining udyam registration.
The registration form can be found on the udyam registration portal.
Udyam registration will be free of charge.
Udyam registration will require an aadhaar number.
In the case of a proprietorship firm the managing partner aadhaar number should be used as well as in the case of a partnership firm and of a karta in the case of a hindu undivided family.
In the case of a company and a limited liability partnership as well as a cooperative society and a society as well as a trust along with its aadhaar number the organization and its authorized signatory must submit its goods services tax identity number and permanent account number.
In case an enterprise is duly registered as an udyam with a permanent account number any deficiency of information when there was no permanent account number the previous year it will be filled out on a self declaration basis.
Only one udyam registration per business is permitted. Any number of operations including production and service as well as both may be specified and added in a single udyam registration.
Whoever intentionally misrepresents and attempt to suppress the self declared fact and figure appearing in the udyam registration and the updating procedure shall be subject to the penalties set forth in section 27 of the act.