The Government of India has introduced a new system for MSME Registration online. This full system of registration called as Udyam Registration. It is free online registration for MSMEs (Micro, Small and Medium Enterprises).
So if you have a small or medium business, register it now and get the several amazing benefits provided to the MSMEs in the country.
Table of Contents
Micro & Small Definition, Calculation of Investment etc.
New Definition of MSME
|Manufacturing & Services||Investment < Rs 1 cr.|
Turnover <Rs. 5 cr
|Investment < Rs 10 cr.|
Turnover <Rs. 50 cr.
|Investment < Rs 50 cr.|
Turnover <Rs. 250 cr.
As the enterprise crosses any of its present criteria, it will not be eligible to continue in that category and need to move to the next higher levels. It will be applicable if the enterprise crosses its limit either in its investment or turnover.
As regards to moving to the lower category, the enterprises must go below the ceiling limits for the present category in both criteria of investment and turnover.
How to Determine the Investment in Plant and Machinery
(a) In the Case of an Existing Enterprises
Your investment in plant and machinery or equipment updated in your Udyam Registration by linking the Income Tax Return filed for the Previous Year (PY). Plant and machinery or equipment includes all the tangible assets but excludes the land and building, furniture and fittings. Its value will calculate as per the Income Tax Rules 1962.
The cost of some assets excluded as per the MSME Development Act 2006. They are
- Cost of pollution control
- cost of research and development
- Cost of industrial safety devices and
- Other items as specified by the notification
(b) In the Case of New Enterprises
In this case, the business did not start filing the ITR as per the Income Tax Act, 1961. So the registration process will not link with the ITR data. Here, the ascertainment of investment in plant and machinery or equipment is based on the declaration of the promoters of the enterprise.
This self-declaration will help the ministry of MSME to find the value of the plant and machinery or equipment. This value is calculating by deducting the GST from the purchase invoice.
This declaration is valid until the 31st March of the financial year (FY) in which the business organization files its first Income Tax Return.
Here also the cost of some assets shall be excluded as per the MSME Development Act 2006, like Cost of pollution control, Cost of research and development, Cost of industrial safety devices and Other items as specified by the notification
How to Calculate the Turnover of the Business
(a) In the case of Existing Enterprises
The value of export of the business organization excludes for the calculation of the Turnover. This export may be the export of goods or export of services or both. As the business organization exists, it might have filed ITR and GST. So the Udyam Registration portal can link the data from the concerned web portals
(b) In the case of New Enterprises
In this case, we do not have any ITR or GST related data. So the promoters can provide the self-declaration. This declaration is also valid till 31st March 2021. All MSMEs must get the PAN and GSTN before 31st March 2021.
Collective Treatment of Enterprises
“All units with Goods and Services Tax Identification Number (GSTIN) listed against the same Permanent Account Number (PAN) shall be collectively treated as one enterprise and the turnover and investment figures for all of such entities shall be seen together and only the aggregate values will be considered for deciding the category as micro, small or medium enterprise.”
How To Register Your Business through Udyam Registration
For registering a micro, small or medium enterprises through Udyam Registration portal, you need the Aadhaar card of the entrepreneur or the authorized person.
Documents Required for the ‘Registration
|Type of Entity||Documents Required|
|Proprietor Firm||Aadhaar of the Proprietor|
|Partnership firm||Aadhaar of the Managing partner|
|Hindu Undivided Family||Aadhaar of the Karta|
|Company||GSTN, PAN along with Aadhaar card of the Authorized person|
|Limited Liability Partnership||GSTN, PAN along with Aadhaar card of the Authorized person|
|Trust||GSTN, PAN along with Aadhaar card of the Authorized person|
|Society||GSTN, PAN along with Aadhaar card of the Authorized person|
Your bank account details are required to fill while filling the form. So you need to keep ready your enterprise Bank Name, Account Number and IFSE Code. It is just for recording the portal and never charge any fee for the registration as the Udyam registration is free.
You can not file more than one Udyam registration for enterprises. In case the business organization is engaged in more than one activities, can be added in one registration
The process of Online Registration in Udyam Registration Portal
All the existing business enterprises having EM -part II/ UAM to get the Udyam registration after July 01, 2020, but before March 2021
For your Udyog Aadhaar registration, you have to visit the link below
Always ensure that you are registering through the Government web portal for Udyam registration. It is a free service.
When you visit the webpage, you can you can see two options
(A) For new enterprises who are not yet registered. This ink is for your new registration
(B) For those who already having registration as EM-II or UAM
(A) For New Enterprises, Who are not yet Registered.
Click the first link to register. This ink is for your new registration.
You need to enter your Aadhaar number in case you run a proprietorship.
If your business is a partnership firm, then you have to provide the Aadhaar number of the Managing Partner.
Karta’s Aadhaar number in case of Hindu Undivided Family. In the case of Companies, Limited Liability Partnership, Cooperative societies, Society, Trust, the organization or authorized signatory shall provide the GSTIN and PAN along with its Aadhaar number.
Once you enter these details, you can find the option to validate and Generate OTP.
You can get the OTP in your Aadhaar Registered mobile number and validate it. You can find the message in green letters that
“ Your Aadhaar has been validated successfully.You can continue the Udyam registration process”.
For PAN verification, you have to select the Type of Organization from the drop-down list.
- Hindu Undivided Family
- Private Limited Company
- Public Limited Company
- Self Helping Group
- Limited Liability Partnership
Then you have to enter your PAN number and validate it. You need to be careful while entering the PAN number, as your data synchronizes from the PAN number.
Once you validate your pan, you can see a message in green letters that
“Your Pan has validated successfully.The fields in the form, which have been closed, will be filled automatically upon verification of your PAN data”.
Now you can start entering the data oof your business enterprises like
Mobile number and email id
Your social category like General,SC, ST, OBC
Gender like Male, Female, Others
Physically handicapped or not
Your business name and location of the plants will be auto-filled if your Aadhaar or pan number is linked to GSTIN. Otherwise, it will be closed, you can not enter the data in this column.
Then, you can enter the Official Address of Enterprise. And your previous EM2/UAM Registration Number, if any.
You need to enter the status of the enterprises, like the date of incorporation or registration, whether you started your production or business etc.
Next, you have to enter the Bank Details of your business like Bank Name, IFSC Code, Bank Account Number.
Then you have to select the main activity of your business enterprises. At this stage, you can add the National Industry Classification (NIC) code for Activities of your business. These codes divided into three types like NIC 2 Digit Code, NIC 4 Digit Code, NIC 5 Digit Code.
You need to select these codes separately or you can use the search option to find all the codes at the same time.
If you need to add more business activities, you can add here by clicking the Add Activity.
Then you need to mention the number of employees working in business enterprises.
The next section meant for the details of investment, plant and machinery or equipment and the Turnover. These columns will enable automatically after the verification of Udyam Registration from Income Tax.
Here, details verified from your Income Tax filing are Depreciated Cost as on 31st March of Previous Year and Net Investment in Plant and Machinery or Equipment.
Under the turnover, it will verify the details like Total Turnover, Export Turnover and Net Turnover.
If you the data for the “Exclusion of cost of Pollution Control, Research & Development and Industrial Safety Devices”, then you can provide it in the column provided for it.
Athe end, select your District Industry Centre and check the tick mark for the declaration.
Then, Submit & Get Final OTP.
You can get the OTP on your Aadhaar linked mobile number. After entering your OTP and verification code, you can see this message
After the verification, they will issue the Udyam Registration, then only you can identify in which category you belong as per the investment and turnover.
(B) For Those Already having Registration as EM-II or UAM
For those already having Registration as EM-II or UAM, can click the link and select the second option.
You need to verify your Udyog Aadhaar with OTP, so enter Udyog Aadhaar number in the column provided and select the OTP option like Mobile OTP or Email OTP.
Click Validate & Generate OTP button.
Then you can see that it will open the same page as of the new Udyog Aadhaar Registration as provided above. Fill it carefully and submit.
This new MSME registration process may take a maximum of 10 minutes. You can do it at your convenience by using your laptop or computer with the internet. It is free. Be careful to find the correct website filing the registration for Udyog Aadhaar. You can enjoy all the benefits available to MSMEs introduced by the Government of India.