All About Udyam Registration

Udyam Registration- process, Investment & Document Required

A micro, small, and medium enterprise (MSME) will henceforth be called as Udyam, according to a statement released by the Ministry of MSME on June 26, 2020. The government has also created particular criteria for categorising MSMEs, as well as a registration mechanism and preparations to help the process go more smoothly.

Also, Read- print udyam registration certificate

According to the announcement, exports of products or services, or both, are to be excluded when calculating the turnover of any firm, whether micro, small, or medium. According to the paper, the registration procedure would be known as Udyam Registration. According to the MSME Ministry, Udyam Registration may now be done online based on self-declaration, with no need to provide paperwork, papers, certificates, or evidence. To register a business, all you need is an Aadhaar number. The new online registration will be accessible starting July 1, 2020.

On the basis of the following criteria, an enterprise is categorised as a micro, small, or medium enterprise:

• A micro-enterprise having a capital investment of less than one crore rupees in plant and machinery or equipment and a turnover of less than five crore rupees.

• A small firm having a capital investment in plant and machinery or equipment of less than ten crore rupees and annual sales of less than fifty crore rupees.

• A medium-sized company having a turnover of not more than 250 crore rupees and an investment in plant and machinery or equipment of not more than fifty crore rupees.

Becoming a micro, small, or midsize business:

• Anyone who wishes to create a micro, small, or medium business may fill out a self-declaration form on the Udyam Registration site without having to provide any documentation, papers, certifications, or evidence.

• Upon registration, a business (referred to as Udyam on the Udyam Registration page) will be issued a permanent identification number known as the Udyam Registration Number.

• On completion of the registration process, an e-certificate titled "Udyam Registration Certificate" will be issued.

Investment and turnover combined as a categorization criterion:

• For the classification of an enterprise as micro, small, or medium, a composite criterion of investment and turnover will be used.

• If an enterprise exceeds the investment or turnover ceiling limits specified for its current category, it will cease to exist in that category and be placed in the next higher category; however, no enterprise will be placed in the lower category unless it falls below the investment and turnover ceiling limits specified for its current category.

• All units with the same Goods and Services Tax Identification Number (GSTIN) listed against the same Permanent Account Number (PAN) will be treated as one enterprise, and the turnover and investment figures for all of these entities will be viewed together, with only the aggregate values being used to determine whether the entity is classified as micro, small, or medium.

Calculation of plant and machinery or equipment investment:

1. Investment in plant and machinery or equipment shall be calculated using the previous year's Income Tax Return (ITR) filed under the Income Tax Act of 1961.

2. In the case of a new business with no prior ITR, the investment will be based on the promoter's self-declaration, and this relaxation will terminate after the 31st March of the financial year in which the business files its first ITR.

3. The term "plant and machinery or equipment of the enterprise" has the same meaning as "plant and machinery" in the Income Tax Rules, 1962, which were enacted under the Income Tax Act, 1961, and includes all physical assets (other than land and building, furniture and fittings).

4. If the firm is a new one without an ITR, the purchase (invoice) value of a plant and machinery or equipment, whether obtained first hand or second hand, shall be taken into account on a self-disclosure basis, excluding Goods and Services Tax (GST).

Turnover calculation:

• Exports of goods or services, or both, shall be omitted from the calculation of any enterprise's turnover for classification purposes, whether micro, small, or medium.

• The Income Tax Act or the Central Goods and Services Act (CGST Act) and the GSTIN must be linked to information about an enterprise's turnover and export turnover.

• The turnover-related numbers of such businesses that do not have a PAN will be evaluated on a self-declaration basis until March 31, 2021, after which PAN and GSTIN will be required.

Process of Registration:

1. The registration form must be found on the Udyam Registration portal.

2. For Udyam Registration, an Aadhaar number will be required.

3. In the case of a proprietorship firm, the Aadhaar number shall be that of the proprietor, of the controlling partner in the case of a partnership firm, and of a karta in the case of a Hindu Undivided Family (HUF).

4. A company, a limited liability partnership, a cooperative society, a society, or a trust must supply their GSTIN and PAN, as well as their Aadhaar number, if they are a company, a limited liability partnership, a cooperative society, a society, or a trust.

5. If a company is properly registered as an Udyam with a PAN, any missing information from earlier years when it did not have a PAN must be self-declared.

6. No business may file more than one Udyam Registration; however, any number of operations, including manufacturing, service, or both, may be stated or added to a single Udyam Registration.

7. Anyone who willfully misrepresents or tries to suppress self-declared facts and figures in the Udyam Registration or update procedure is subject to the punishment provided in section 27 of the Act.

Existing business registrations:

1. On or after July 1, 2020, all current firms registered under EM–Part-II or UAM must re-register on the Udyam Registration portal.

2. All businesses that were registered before June 30, 2020 will be reclassified in accordance with this notice.

3. Existing businesses that were registered before the 30th of June, 2020, will be valid only until the 31st of December, 2021.

4. An enterprise that is registered with any other Ministry of Micro, Small and Medium Enterprises organisation must register with Udyam Registration.

Suggested Read- udyam registration benefits in hindi

Information update and classification changeover period:

1. On a self-declaration basis, an organisation with an Udyam Registration Number must update its information online in the Udyam Registration site, including the contents of the preceding financial year's ITR and GST Return, as well as any other supplementary information that may be required.

2. The enterprise's categorization will be updated based on information provided or received from government sources, such as ITRs or GST returns.

3. In the event of a company's graduation (from a lower to a higher category) or reverse-graduation (sliding down to a lower category), the enterprise will be notified of the change in status.

4. If an enterprise's investment in plant and machinery or equipment, or its turnover, or both, increases and it is reclassified, the enterprise will keep its current status until the end of the year in which it was registered.

5. If the essential information is not updated within the timeframe given in the online Udyam Registration site, the enterprise's status will be suspended.

6. In the event of an enterprise's reverse-graduation, whether as a result of re-classification or actual changes in investment in plant and machinery or equipment or turnover or both, and whether or not the enterprise is registered under the Act, the enterprise will remain in its current category until the end of the financial year and will be given the benefit of the changed status on that date.