The Udyam Registration Portal, also called MSME Registration or SSI Registration, is a certificate issued to micro, small and medium enterprises in India under the MSME 2006 Act. In India, the MSME registration was formerly known as Udyam Registration. The main objectives of micro, small and medium-sized enterprises with regard to Udyam registration are set out below:
- Large micro, small and medium-sized enterprises provide the tools they need to successfully tackle widespread unemployment and poverty.
- Combine the benefits of multiple government initiatives for SSI units in one place.
- Protect SSI from financial abuse by large companies.
Eligible for Udyam registration:
In India, not all companies need to register with Udyama. The companies listed below are eligible to register with Udyam if their investments in plants and machinery can be qualified micro, small or medium companies.
- Investments in equipment and machinery up to Rs. 25,000 million for micro-enterprises.
- Small businesses can invest up to Rs. 5 million in plants and machines.
- Medium-sized companies can invest up to Rs. 10 million in plants and machines.
Become a company:
- Anyone who wants to run a micro, small or medium-sized enterprise in India should register with Udyama. Once the registration is completed, a permanent identification number known as the Udyam registration number will be provided by an entity known as the Udyam.
- Once the registration process is complete, a Udyam registration certificate will be issued.
- All units with the same GSTIN listed on the same PAN should be considered as one company and the turnover and investment data for all entities should be considered together, using the aggregate amount to determine whether the entity is classified as micro, small. , or a medium-sized company.
Calculation of equipment and machinery costs:
- The tax return for the previous year, filed under the Income Tax Act 1961, must be used to calculate the investment in the plant, machinery or equipment.
- If the new company does not submit an ITR, the investment is based on the founder’s own declaration, which expires after 31 March of the financial year in which the first ITR was submitted. The term “plant and machinery” has the same meaning as “plant and machinery” in the Income Tax Rules of 1962, adopted under the Income Tax Act of 1961, and refers to physical property other than land, buildings, furniture, and fittings.
- If the company is newly established and does not have an ITR, the invoiced amount for the plant, machine or equipment must be checked, regardless of whether it is purchased or used, and the GST must be deducted on the basis of its own declaration.
- Some factors mentioned in Note I, paragraph 7 of the Act must be excluded from the calculation of investments in equipment and machinery.
- If a company’s turnover is measured, whether it is micro, small or large, the export of products or services or both should be eliminated.
- GSTIN must be associated with information on the company’s turnover and export turnover under the Income Tax Act as CGST. Turnover relating to the numbers of such an entity without PAN will be assessed on the basis of its own declaration for the period up to and including 31 December 2021. PAN and GSTIN are required.
Compound investment and turnover criteria for classification:
A combination of investment and turnover behaviour should be used to classify a business as micro, small or medium.
The company will be moved to the next higher category if it sets above the limits for the current category any investment or turnover; however, no company should be downgraded unless it is set below the ceilings for the current category of investment and turnover.
Documents required for Udyam registration:
- What documents do I need to register for Udyam in India? If there is real estate, the applicant’s Aadhar and PAN card is required to obtain Udyam registration.
- In the case of real estate, the applicant’s Aadhar number and a valid PAN number are also required.
- If there is a partnership, it is necessary to use the Aadhar and PAN of one of the partners.
- In the case of a company, the directors Aadhar and PAN can be used.
- In the case of LLP, it is necessary to use the Aadhar card and the PAN of the selected partner. If the applicant, as an authorised signatory, does not yet have a valid Aadhar card, he must first apply for it at the Aadhar registration center. The Udyam registration process can begin as soon as you obtain an Aadhar number.
Udyam registration has many benefits:
- Udyam registration facilitates the process of starting a company like MSME, but also provides some additional benefits.
- Bank loans offer a lower interest rate and in some cases may not require a guarantee or mortgage.
- The applicant is not entitled to state aid. Applicants are provided with financial support for the exhibition of their products at international fairs.
- Registering with Udyam can also save you money on upfront costs and even patents.
- SMEs that register with Udyam can also benefit from a number of tax benefits and exemptions.
- Tariff subsidies are offered, as well as capital and government subsidies.
- Obtaining permission, approval and registration is easier thanks to Udyam Aadhar
Suggested Read- How to Cancel Udyam registration
In this article, I have covered the whole udyam registration process as well as its benefits. I hope this information helps you.