Micro, medium and small enterprises will now be simply categorised as ‘udyam’, and such entities can simply file for the process of Udyam Registration online based on self-declaration with no requirement to upload documents, papers, certificates or proof.
Udyam is a Sanskrit word that means ‘enterprise’.
This and other measures to give a fillip to the country’s MSME sector are part of a consolidated notification that was released in the form of guidelines for their classification and registration by the Ministry of MSME on Friday.
Officials of the Ministry of MSME said online registration through Aadhar and self-declaration was made possible because the Udyam Registration process has been fully integrated with the systems of income tax and GST, and the details filled in can be verified against the information provided with the PAN or GSTIN numbers.
It may be recalled that the ministry had published a notification on June 1, 2020, with new criteria for the classification of MSMEs based on investment and turnover. It was also said that it will be effective from July 1.
Accordingly, the ministry has moved in advance towards implementing the new norms from July. For this purpose, the ministry had undertaken a series of consultations with various stakeholders including the advisory committee, officials of income tax, GST, state governments and MSME associations in the month of June.
This notification gives the detailed criteria for the classification of MSMEs and the procedure for registration and the arrangements made by the ministry for facilitation in this process. This notification also supersedes all earlier notifications issued concerning classification or registration of MSMEs.
Other highlights of the notification include registration of an enterprise just based on Aadhaar number. Other details can be given on a self-declaration basis without any requirement of uploading or submitting any papers, making the exercise paperless. As declared earlier, investment in ‘plant and machinery or equipment’ and ‘turnover’ are the basic criteria for the classification of MSMEs now. The notification clarifies that exports of goods or services or both shall be excluded while calculating the turnover of any enterprise whether micro, small or medium. The process of registration can be done online through the portal which will be made known to the public before July 1, the date from which this new arrangement is going to be effective.
In another first, the Ministry of MSME has established a strong facilitation mechanism for the MSMEs. This process is in the form of single window systems at the district level and regional level. It will help those entrepreneurs who are not able to file the udyam registration for any reason. At the district level, the District Industry Centres have been made responsible for facilitating the entrepreneurs. Similarly, the ministry’s recent initiative of Champions Control Rooms across the country has been made legally responsible for facilitating such entrepreneurs in registration and even thereafter.
Individuals who do not have a valid Aadhaar number can also approach the single window systems for facilitation along with Adhaar enrolment request or identity, bank photo passbook, voter ID card, passport or driving license.
The Minister of MSME, Nitin Gadkari while releasing the new said that their new system of classification, registration and facilitation of MSMEs will be an extremely simple and yet fast-track, seamless and globally benchmarked process and a revolutionary step towards the ease of doing business. These steps and strategies also give a strong message that the ministry is standing strongly behind the MSMEs who are facing several challenges at this time.