Earlier known SSI registered entities are now known and registered as MSME, i.e.; Micro, Small and Medium Enterprises. MSME stands for Micro, Small and Medium enterprises, categorized based on the annual revenue in business. For availing the benefits under the MSMED Act from Central or State Government and the Banking Sector, MSME Registration is required.
After registration, these entities possess MSME registration certificate, registered with MSME Department of the Central Government under MSME Development Act, 2006. The Act was passed for the promotion and growth of the businesses operating at small or medium scale.
Previously all major activities were eligible for registration under MSME, but now trading and other few activities are specifically excluded from eligibility. Although the registration is voluntary, businesses prefer to obtain MSME registration online due to numerous benefits declared by the government.
On 13th May, 2020, Government of India through Aatmanirbhar Bharat Package announced some major relief to the MSMEs. And one of the major reliefs is that the Government revised the definition of the MSMe as a whole.
Under the new definitions, the distinction between manufacturing and services enterprises has been eliminated and the investments have been revised upwards and an additional criteria of turnover has been introduced.
The registration of MSME is an online process The applicants can get the MSME Registration certificate with validity of lifetime in 3-5 working days. The certificate of MSME Registration is for both manufacturing sector and service sector enterprises.
Revised Definition of MSME (w.e.f 01.07.2020)
As per revised definition, An enterprise shall be classified as a micro, small or medium enterprise on the basis of the criteria of investment and turnover. The criteria is as follows:
Category of Enterprise
Investment in plant and machinery or equipment does not exceed Rs. 1 crore (< Rs. 1 crore)
Turnover does not exceed Rs. 5 crore (< Rs. 5 crore)
Investment in plant and machinery or equipment does not exceed Rs. 10 crore (< Rs. 10 crore)
Turnover does not exceed Rs. 50 crore (< Rs. 50 crore)
Investment in plant and machinery or equipment does not exceed Rs. 50 crore (< Rs. 50 crore)
Turnover does not exceed Rs. 250 crore (< Rs. 250 crore)