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New MSME Udyam Registration Process and penalty

 

After receiving the recommendations of the Advisory Committee for MSME Udyam Registration the central Government comes up with:

  • The government introduced some specific criteria for classifying the enterprises as micro, small and medium enterprises.

  • Also notified about the form and the process of filing the memorandum (Udyam Registration), w.e.f 1st day of July 2020

 

GST Identification Number Not Required for Udyam Registration

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The Modi Government has taken another step for the paperless, simplified process, and time-saving mechanism. Now, for Micro, Small, and Medium Enterprises (MSME) there is no requirement of unique Goods and Services Tax Identification Number (GSTIN) during “Udyam Registration”.

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A notification has been issued from ministers of MSME on 05.03.2021 to remove the mandatory requirement for filing Udyam Registration with those for filing GST Returns. “The exemption from the requirement of having GSTIN shall be as per the provisions of the Central Goods and Services Tax Act, 2017 (12 of 2017).” Now, the proprietor may use his or her PAN only for registering the enterprise.

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“In case of any proprietorship enterprise not registered under any Act or rules of the Central Government or the State Government, the proprietor may use his or her PAN for registration of the enterprise in the Udyam Registration portal and for all other types of enterprises PAN shall be mandatory,”

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As per the Notification released by Modi Government dated 26.06.2020, GSTIN was a prerequisite for registration on the Udyam Registration Portal, with effect from 01.04.2021. However, a huge number of representations had been received by the central government from various MSME Associations.

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The aforesaid association stated to the central government that “making of GSTIN mandatory” is affecting the registration process. The reason being, many enterprises have been exempted from the mandatory requirement of filing GST Returns as per the above-mentioned notification. This phenomenon can be attributed to the existence of a large number of MSME having an annual turnover less than the fixed limit for exemption from registration as per the GST Act. Thereafter, the matter had been examined by the central government and the aforesaid notification has been issued by the central government for relaxation.

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Moreover, This relaxation shall further help various micro-enterprises (that includes skilled craftsmen and artisans, and other enterprises in an informal sector/unorganized sector) to get the registration quickly and easily. The proprietor of a firm may use his or her PAN only for registration of the enterprise in the Udyam Registration Portal.

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MSME Udyam Registration Process

  • Furnish Udyam Registration Online

    • On the basis of Self declaration.

    • No need to upload documents, certificates, papers and proof.

  • After successful Registration, Udyam Registration Number (URN) will be allotted.

  • Udyam registration certificate (E-Certificate) will be provided on completion.

Composite criteria of investment and turnover for classification

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Shifting from one category to another:

  • Will be placed in the next Higher Category if an enterprise surpasses the ceiling limits of its present category in Investment or T/o criteria.

  • Will be  placed in the lower category if the enterprise failed to keep within the ceiling limits specified in its current category in both categories Investment and T/o.

 # It needs to be considered that All units having GST number against PAN will be collectively treated as 1 Enterprise.

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  • The T/o and Investment will be clustered for all the units and only then the category will be decided.

Plant & Machinery:

  • Includes all TANGIBLE Assets

  • Excluding

    • Land & Building

    • Furniture & Fixture

  •  Purchase value of P & M:

    • First hand or second hand

    • Excluding GST

    • Self-disclosure basis – If the enterprise is NEW

Calculation of turnover

  • Excluded:

    • Export of Goods/Services

  •  Definition of T/o & Export T/o according to the income tax act /CGST Act and GSTIN)

  •  Turnover on the basis of Self Declaration if “NO PAN”

    • Up to 31/03/2021

    • Thereafter PAN & GST mandatory

 

Udyam Registration Process:

  • For proper registration, fill the  at Udyam Registration Portal

  • Application Without any fee.

  • Mandatory Aadhar of:

    • Proprietor

    • Partnership – Managing Partner

    • HUF- Karta

    • Company/LLP/Co-op Society/Society/Trust – Authorised Signatory and GST & PAN of the organization

  • Only 1 application – On which all activities of manufacturing or even services will be included

 

MSME Udyam Registration Penalty:

The registration process for Existing  Enterprises:

  • All existing registered under:

    • EM – Part II OR (Entrepreneurs Memorandum)

    • UAM (Udyog Aadhar Memorandum Portal)

    • Again register on Udyam Registration Portal w.e.f  01/07/20

  • All enterprise registered till 30/06/2020 will be classified again

  • An existing enterprise registered up to 30/03/2020 – valid till 31/03/2021

 

Updating of information:

  • Update the following information online:

    • Details of GST return and ITR

    • For the Previous Year

    • On Self Declaration Basis

  • Failure to update within the predefined time– Registration will be suspended.

  • As per the latest information – The classification will be updated

  • Enterprise will be communicated for:

    • Graduation – From lower to Higher Category

    • Reverse graduation – From Higher to Lower Category

 

Facilitation and grievance redressal of enterprises

  • The Champions Control Rooms

  • District Industries Centres (DIC)

  • If the Aadhar is not available or any there is some difficulty in the Registration then above two offices can facilitate the registration on

    • Aadhaar enrolment identity slip or

    • Copy of Aadhaar enrolment request or

    • Bank photo passbook or

    • Voter identity card/ passport/driving licence.

 

 

DISCLAIMER- These materials are public information and have been prepared solely for educational purposes. These materials reflect only the personal views of the author and are not individual legal advice.

It is understood that each case is fact specific and that the appropriate solution in any case will vary. Finally, the owner will not be accountable for any loses injuries or damages from the exposures or usage of this information

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