Udyam Registration: Everything You Need to Know

The Government of India (GOI) has launched a number of assistance measures for the MSME sector in response to the COVID-19 epidemic in order to strengthen the nation’s economy and industry. Government measures to create “Atma Nirbhar Bharat” include making it easier to conduct business, Digital India, start-ups, easy loans made

Also Read: Udyam Registration Online

 in India, subsidies, a moratorium on loans, lower interest rates, straightforward tax compliance, and openness. 

In the midst of the turmoil brought on by the coronavirus, the government is also working on a number of projects, such as the creation of enormous land pools, to entice foreign investors to India. In order for many businesses to take advantage of the benefits offered, including those that were previously denied, the government has redefined the MSME statute and loosened numerous provisions in accordance. Beginning on July 1, 2020, the government would require “Udyam Registration” for all existing “EM-II” and “Udyog Aadhar Memorandum”-registered businesses as well as new MSME businesses.

How do I sign up through the Udyam Registration Portal?

• Anyone who wants to start a micro, small, or medium business can register online through the Udyam Registration portal.
• Based only on self-declaration.
• No need to submit any papers, certificates, or other supporting documentation
• A permanent identifying number known as the “Udyam Registration Number” will be given to an enterprise (referred to as “Udyam”) upon registration in the Udyam Registration portal.
• Upon successful completion of the registration process, an electronic certificate called an Udyam Registration Certificate will be issued.

How would the Turnover & Investment Criteria for Udyam Registration be determined?

1. For an enterprise to be classified as micro, small, or medium-sized, a composite requirement of investment and turnover must be met, meaning that both factors must be taken into account. Small, medium, or micro
2. In any of the two criteria of investment or turnover, if an enterprise exceeds the ceiling restrictions set for its current category, it will be removed from that category and moved to the next higher category.
3. Once an enterprise is registered, it cannot be downgraded unless it falls below the ceiling restrictions set for its current category in terms of both investment and turnover.
4. The classification of an entity as a micro, small, or medium enterprise will only take into account the aggregate values for all units with Goods and Services Tax Identification Numbers (GSTIN) listed against the same Permanent Account Numbers (PAN), which are all treated collectively as one enterprise.

How much money will I need to invest in machinery and/or equipment for Udyam Registration?

• The prior year’s Income Tax Return (ITR), which was submitted in accordance with the Income Tax Act of 1961, will be used to calculate investments in plant, machinery, or equipment.
• When a new business is involved and there is no prior ITR available, the investment will be based on the promoter’s self-declaration. This relaxation will terminate after the 31st March of the fiscal year in which the business files its first ITR.
• The phrase “plant and machinery or equipment of the enterprise” has the same definition as that given to that term in the Income Tax Rules, 1962, which were created in accordance with the Income Tax Act, 1961, and includes all tangible assets.
• If the business is brand-new and has no ITR, the purchase (invoice) value of any machinery or equipment, whether it was bought new or used, shall be considered, minus Goods and Services Tax (GST), on a self-disclosure basis.

How is the Turnover for Udyam Registration Calculated?

• Exports of goods, services, or both must be disregarded when determining an enterprise’s turnover for classification, whether it is a micro, small, or medium-sized business.
• The Income Tax Act or the Central Goods and Services Act (CGST Act) and the GSTIN must be linked to information about an enterprise’s revenue and revenue from exports.
• For a period ending on March 31, 2021, the turnover-related numbers of such a business that does not have a PAN will be taken into consideration on a self-declaration basis; thereafter, a PAN and a GSTIN will be required.

What is the Udyam Registration Number procedure?

• The Udyam Registration portal’s guidelines must be followed when filling out the registration form.
• An Udyam Registration can be filed without cost.
• Udyam Registration will require an Aadhaar number.
• In the case of a proprietorship business, the controlling partner in the case of a partnership business, and a Karta in the case of a Hindu Undivided Family (HUF), the Aadhaar number must belong to the proprietor.
• If the organisation is a company, limited liability partnership, cooperative society, society, or trust, the authorised signatory must also supply the organization’s Aadhaar number, GSTIN, and PAN.
• Any information that is missing for prior years when an enterprise was not properly registered as an Udyam with a PAN must be filled out on a self-declaration basis.
• No business shall submit more than one Udyam Registration; nevertheless, an Udyam Registration may list or include a variety of operations, including manufacturing, services, or both.

Anyone who knowingly gives false information or makes an effort to hide self-reported facts and figures in the Udyam Registration or Updation procedure is subject to the punishment outlined in Section 27 of the Act.