Clarification on New Definition of Micro, Small and Medium Enterprises (MSMEs) provided by RBI
Vide Circular dated 21st August 2020, RBI has came out with following clarifications with respect to new definition of Micro and Small Medium Enterprises (MSMEs):
1. As per the provisions of the MSMED Act, 2006, classification or re-classification of MSMES is the statutory responsibility of the Government of India (GoI), Ministry of MSME.
2.Online registration and obtaining 'Udyam Registration Certificate' has made compulsory for all the eligible enterprises.
3.The Entrepreneurs Memorandum Part-II (EM Part-II) and Udyog Aadhar Memorandum (UAMs) issued till 30th June 2020 to the existing MSMEs shall be valid till 31st March 2021 and as such they need to fill new registration in the Udyam Registration Portal well before 31st March, 2021.
4.The 'Udyam Registration Certificate' issued to enterprises exempted from filling GSTR and/or ITR returns on self declaration basis shall also be valid till 31st March 2021.
5.All the lenders or Financial Institutions may obtain 'Udyam Registration Certificate' from the enterprises.
6.The value of the Plant and Machinery or Equipment referred in the provisions of MSMEs shall means written down value as at the end of the Financial Year as defined in the Income Tax Act and not original price or acquisition cost. The Udyam Registration online form also consider depreciated cost as on 31st March each year of the relevant previous year.
The above instruction provided in Para 6 above override the earlier instruction where value of investment of plant and machinery or Equipment was calculated on original price (based on certain specified documents).
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