MSME Definition: Changes in the definition of MSMEs

Jasmeen Marwah | Last updated: 02 June 2020

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The definition of Micro, Small, and Medium Enterprises (MSMEs) in India has been revised, introducing new criteria for investment and turnover. Previously, only investment in plant and machinery was considered. Now, the assessment includes overall investment and a new composite turnover criterion. These updated definitions apply to both manufacturing and service sectors, with specific thresholds for micro, small, and medium enterprises.

REVISION IN MSMEs (Micro, Small and Medium Enterprises)

Government has changed following things in relation to MSME:

Definition of MSMEs
Investment Criteria
Turnover Criteria

MSME Definition Changes: New Investment and Turnover Criteria

Existing	Current
For MSME, enterprise has to consider investment in Plant & Machinery or Equipment	Now Enterprise has to consider over all investment done by them
No Turnover Criteria	New Turnover Criteria Introduced
Different criteria for manufacturing and service sector	Composite Criteria for both sectors

Manufacturing Enterprises: -

For Micro:- Investment in plant & machinery < INR 25 Lakh, but now investment < INR 1 cr. and Turnover < INR 5 cr.
For Small:- Investment in plant & machinery > INR 25 Lakh< INR 5 cr., but now investment > INR 1 cr. < INR 10 cr. and Turnover > INR 5cr.< INR 50 cr.
For Medium:- Investment in plant & machinery > INR 5 cr.< INR 10 cr., but now investment > INR 10 cr.< INR 20 cr. and Turnover > INR 50 cr.< INR 100 cr.

Servicing Enterprises: -

For Micro:- Investment in plant & machinery < INR 10 Lakh, but now investment < INR 1 cr. and Turnover < INR 5 cr.
For Small:- Investment in plant & machinery > INR 10 Lakh< INR 2 cr., but now investment > INR 1 cr. < INR 10 cr. and Turnover > INR 5 cr.< INR 50 cr.
For Medium:- Investment in plant & machinery > INR 2 cr.< INR 5 cr., but now investment > INR 10 cr.< INR 20 cr. and Turnover > INR 50 cr.< INR 100 cr.

Here "and" is "or"

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Jasmeen Marwah

CS CA

Hello! I am a qualified chartered accountant and a company secretary. I am into CA Practice I am here to share my views in form of articles. Keep supporting and message me any suggestions Thank you.

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