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MSME: New definition that will take effect from 1st July



REVISION IN MSMEs (Micro, Small and Medium Enterprises)

Government has revised the following things in relation to MSME:

 

Existing

Current (now revised)

Revised

For MSME, an enterprise has to consider investment in Plant & Machinery or Equipment

Now Enterprise has to consider overall investment done by them

Specified investment in Plant & Machinery or Equipment

No Turnover Criteria

New Turnover Criteria Introduced

Export not to consider in Turnover

Different criteria for manufacturing and service sector

Composite Criteria for both sectors

Composite Criteria-investment and turnover limit for medium enterprise increased

MSME: Further revision in definition

Manufacturing Enterprises:

  1. For Micro: - Investment in plant & machinery or equipment< INR 25 Lakh, but now Investment in plant & machinery or equipment < INR 1 cr. and Turnover < INR 5 cr.
  2. For Small: - Investment in plant & machinery or equipment > INR 25 Lakh< INR 5 cr., but now Investment in plant & machinery or equipment > INR 1 cr. < INR 10 cr. and Turnover > INR 5cr.< INR 50 cr.
  3. For Medium: - Investment in plant & machinery or equipment > INR 5 cr.< INR 10 cr., but now Investment in plant & machinery or equipment > INR 10 cr.< INR 50 cr. and Turnover > INR 50 cr.< INR 250 cr.
 

Servicing Enterprises:

  1. For Micro: - Investment in plant & machinery or equipment < INR 10 Lakh, but now Investment in plant & machinery or equipment < INR 1 cr. and Turnover < INR 5 cr.
  2. For Small: - Investment in plant & machinery or equipment > INR 10 Lakh< INR 2 cr., but now Investment in plant & machinery or equipment > INR 1 cr. < INR 10 cr. and Turnover > INR 5 cr.< INR 50 cr.
  3. For Medium: - Investment in plant & machinery or equipment > INR 2 cr.< INR 5 cr., but now Investment in plant & machinery or equipment > INR 10 cr.< INR 50 cr. and Turnover > INR 50 cr.< INR 250 cr.

The above change shall come into effect from 1st July, 2020

Government has launched CHAMPION portal. It has following objectives: -

  1. To help the MSMEs in this difficult situation in terms of finance, raw materials, labour, permissions, etc.
  2. To help the MSMEs capture new opportunities including manufacturing of medical items & accessories.
  3. To identify the sparks, i.e., the bright MSMEs who can withstand at present and become national and international champions.
 

Link:




About the Author

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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