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What should every MSME know about Udyam Yojana ?
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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Micro, Medium and Small Enterprises (MSME) contribute nearly a third of India’s gross domestic product while providing a livelihood to over 110 million people. However, most small businesses are prone to financial fragility, particularly during economic slowdowns, when demand falls, and the business cycle is slower. This was evident during the lockdown and in the aftermath of the COVID-19 pandemic. To bring India’s MSMEs under one umbrella and secure them with various benefits, the government has revamped Udyog Aadhaar into the new Udyam registration scheme.
If you have an MSME business, the Udyam registration is a new online registration scheme that you can apply for. Businesses are registered in the Udyam registration portal under the Ministry of MSME.
Udyam registration offers a simple, user-friendly process that allows MSMEs to register through an on-page registration form. You can file online through udyamregistration.gov.in, and upon completion, you receive a permanent Udyam Registration Number and the Udyam Registration e-certificate. Any type of entity that falls under the MSME category can apply for this registration.
Eligibility
Each MSME category has a single eligibility criterion based on investment and turnover.
If your enterprise exceeds any one of the two criteria, it is automatically placed in the higher category. However, your enterprise will be placed in a lower category only if both the investment and turnover criteria falls to the lower category.
Registration process
The Udyam registration can be filed by new entrepreneurs who are not yet registered as an MSME or under the Entrepreneurs Memorandum II. You can also migrate or re-register under the Udyam registration if you are already registered under the Udyog Aadhaar Memorandum, including assisted filing cases.
To register you have to visit the portal and fill up the registration form. It is a paperless process that is based on selfdeclaration. It is done based only on the Aadhaar number and there are no registration fees or charges. The online application is processed by a Registration Executive. If successfully processed, the registration certificate is mailed to the registered email ID.
The Udyam registration system is integrated with Income Tax and GSTIN systems. GST registration and PAN are mandatory for Udyam registration from 1st April 2021.
Benefits of registering under Udyam registration
One of the major benefits of the registration is that you are eligible to apply for loans without collaterals from banks. These loans are accepted by the Government, the Small Industries Development Bank of India, and the Credit Guarantee Trust Fund Scheme of the Ministry of MSME.
Besides, as a registered MSME, you are also eligible for various exemptions and subsidies, including,
The Ministry of MSME has Champions Control Rooms set up in various institutions and offices who will conduct the registration and further handholding of the registered MSMEs. The District Industries Centres will also act as a single contact point for facilitation within their respective districts. Rolled out with effect from 1st July 2020, the Udyam registration offers you a rich bouquet of benefits while promoting the mantras of “Atmanirbhar Bharat” and “Vocal for Local”.
This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. and its employees. We make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article does not constitute legal advice. Kotak Mahindra Bank, its employees and the contributors are not responsible or liable for any damage or loss resulting from reliance on or use of any information contained herein.
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