What is the meaning of Udyam Registration?
Udyam Registration in India, also known as MSME Registration or SSI Registration, is a certificate provided to micro, small, and medium-sized businesses in India under the MSME Act of 2006. MSME registration was the previous name for Udyam registration in India. In terms of Udyam registration, the following are the main goals of Micro, Small, and Medium Enterprises:
- To enable large-scale Micro, Small, and Medium Enterprises to effectively address widespread unemployment and poverty issues.
- To provide SSI units with the benefits of several government initiatives in one place.
- To protect the SSI against financial exploitation at the hands of huge businesses.
Udyam Registration Eligibility:
In India, who is qualified for Udyam registration?
In India, not all enterprises are required to seek Udyam registration. The entities listed below are eligible for Udyam registration if they are classed as micro, small, or medium companies based on their investment in plants and machinery.
- Microbusinesses- Plant, and machinery investment of up to Rs. 25 lakh is possible.
- Small Businesses- Plant and machinery investment of up to Rs. 5 crores.
- Medium-Sized Businesses- Plant and machinery investment of up to Rs. 10 crores.
Becoming an Enterprise:
- Anyone planning to start a micro, small, or medium business in India should apply for an Udyam registration.
- The permanent identifying number known as the Udyam Registration Number is assigned to an enterprise known as Udyam once the registration is completed.
- After the registration process is completed, an Udyam Registration Certificate is issued.
- All units with the same Goods and Service Tax Identification Number ( GSTIN) listed against the same Permanent Account Number ( PAN) should be treated as one enterprise, and the turnover and investment figures for all entities should be viewed together, with only the aggregate values being used to determine whether the entity is classified as a micro, small, or medium enterprise.
Calculation of plant and machinery investment:
- The calculation of investment in plant, machinery, or equipment must be linked to the previous year’s Income Tax Return filed under the Income Tax Act of 1961.
- If a new business does not have an ITR filing, the investment will be based on the promoter’s self-declaration, and this relaxation will terminate after the 31st March of the financial year in which the first ITR is filed.
- The term “plant and machinery or equipment” should have the same meaning as “plant and machinery” in the Income Tax Rules, 1962, which are enacted under the Income Tax Act, 1961, and shall refer to tangible assets other than land, buildings, furniture, and fittings.
- If an organization is freshly founded without an ITR, the invoice value of a plant, machinery, or equipment should be evaluated, whether it is purchased first hand or second hand, and the GST should be subtracted on a self-disclosure basis.
- The cost of certain items listed in explanation I to subsection 7 of the Act should be omitted from the computation of the plant and machinery investment.
- When determining the turnover of a business, whether it is micro, small, or big, exports of goods or services, or both, should be omitted.
- The Income Tax Act or the CGST and the GSTIN should be linked to information about an enterprise’s turnover and export turnover.
- For the period up to and including December 31, 2021, the turnover relevant to the figures of such an enterprise that does not have a PAN will be considered on a self-declaration basis. The PAN and GSTIN will be required.
Composite criteria of investment and turnover for classification:
The classification of an enterprise as micro, small, or medium should be based on a composite of investment and turnover criteria.
If an enterprise exceeds the ceiling limits set for the current category in either investment or turnover, it will be moved to the next higher category; however, no enterprise should be moved to the lower category unless it falls below the ceiling limits set for the current category in both investment and turnover.
Required Documents for Udyam Registration:
What documents do I need to register for Udyam in India?
- The applicant’s Aadhar card and PAN are required to obtain Udyam Registration in the case of a proprietorship.
- In the event of a proprietorship, the applicant’s Aadhar number and a valid PAN number are also necessary.
- In the case of a partnership, the partner’s Aadhar and PAN must be used.
- The Directors Aadhar and PAN might be employed in the case of a firm.
- In the event of an LLP, the chosen partner’s Aadhar and PAN card must be used.
If the applicant or an authorized signatory does not already have a valid Aadhar Card, they must first apply for one at an Aadhar enrolment center. The Udyam Registration process can begin once the Aadhar number is obtained.
Details for acquiring Udyam Registration must be given:
What information is needed for Udyam registration?
- Aadhar Number ( Mandatory )
- The entrepreneur’s name as it appears on the Aadhar Card ( Should be linked with the mobile number)
- PAN (Personal Identification Number) (Pvt/LLP/Partnership/Company PAN)
- The Firm’s Complete Address
- When did your company start?
- Company or personal bank account information (current/savings)
- IFSC (International Financial Services Code)
- Name and location of the bank ( Only the proprietor can use a savings account )
- Manufacturing/services is a major activity.
- Select the type of manufacturing if it is manufacturing.
- In the case of service, the type should be service
- NIC (National Identification Code)
- The number of people employed by the company
- Do you have a GSTIN number?
- Industry Center for the District
- Indicate the location ( Urban or Rural)
The Advantages of Udyam Registration:
What are the advantages of registering for Udyam in India?
- Udyam Registration has simplified the process of registering a business as an MSMEs, but it also has some other advantages.
- Bank loans can be obtained at a cheaper rate of interest, and in some situations, without the need for collateral or a mortgage.
- The applicant is ineligible for government assistance.
- The applicant receives financial assistance in order to exhibit their products at international trade shows.
- Udyam registration can also help you save money on startup costs and even patenting.
- Small and medium-sized businesses with Udyam registration can also take advantage of several tax breaks and exemptions.
- Tariff subsidies, as well as capital and government subsidies, are available.
- With Udyam Aadhar registration, obtaining licenses, permissions, and registration becomes easier.
Suggested Read- print udyam registration certificate
In this blog, I have discussed the whole process of udyam registration including its benefits. I hope this will be helpful for you.