Frequently Asked Question and Answer about UDYAM REGISTRATION

UDYAM registration consultant in guwahati.

1. What is Udyam Registration?

Ans: - Udyam Registration is the new process of MSME/UDYOG AADHAAR Registration launched by the Ministry of Micro, Small and Medium Enterprises on July 1, 2020.

2. How to Apply for Online Udyam Registration?

Ans: - For online registration, visit our website - msmeregistration.org and get Udyam registration done in a simple procedure. Read our section on “How to Register MSME using Udyam Registration Portal” to directly register on the portal. If you have any questions related to online registration, please feel free to call our customer executive.

3. Is physical copy of Certificate will be issued?

Ans: - In the interest of environment no physical copy of MSME Certificate will be issued. Government believes in paperless work.

4. Is Aadhaar Number mandatory for online MSME Registration?

Ans: - At present Aadhaar Number is mandatory for issuance of MSME Certificate

5. What are the fees for online Udyam Registration?

Ans: - The fees of Udyam Registration via msmeregistration.org Experts will charge you Rs 1999/-

6. What are the documents required for Udyam Registration?

Ans: - Some basics details required for registration under the Act as follows:

• PAN of Entity and its Authorised Signatory (ies);
• Aadhaar number
• Proprietors – Proprietorship firm;
• Partnership – Managing partner
• Hindu Undivided Family (HUF)– Karta
• Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust – Authorised signatory
• E-mail ID and Mobile No. of Enterprise and person mentioned above
• Plant Address and Office Address.
• Bank Details viz. Account Number, IFSC code
• Miscellaneous Information viz. Social Category, Business Activity code, No. of employees etc.

7. What is the Difference between Udyog Aadhaar and Udyam registration?

Ans: - The Indian government presented a few business conspires and changed the business meaning of MSME. As of late, Govt gave the new Udyam Registration Portal, which is the MSME Department's another activity to enlist the new route for enrolment of MSME or Udyog Aadhaar.
The main objective to introduce the Udyam registration is to simplify the registration process and reduce the time consumption. Now the small scale business can easily register themselves under Micro Small Medium Enterprise or MSME.
Udyam registration is the replacement of the old process of the Udyog Aadhaar registration for registering under MSME. Earlier the Udyog Aadhaar registration process was confusing and time consuming as there were many categories and multiple pages to go through. It required lots of paperwork, and to upload documents on the portal. Whereas for Udyam it is the single window, paperless process, no additional documents or certificates required in order to register under MSME.

8. Is Udyam Registration Mandatory?

Ans: - Yes, Udyam registration is mandatory in India.

9. What are the benefits given to MSME?

Ans: -

• MSME registration helps in getting government tenders
• Under bank loan, 15% import subsidy on fully automatic machinery
• Becomes easy to get licenses, approvals and registrations, irrespective of field of business
• Compensation of ISO certificate expenditure
• Helps in getting low interest rates in loans
• Registered MSMEs gets tariff subsidies and tax and capital subsidies
• Gets exemption under Direct Tax Laws
• Concession in electricity Bills
• Protection against payments (Delayed payments) MSME Samadhan
• Technology and quality up-gradation support to MSMEs

10. Who are eligible for registration as Micro, Small &Medium Enterprise?

Ans: - Any person who intends to establish a micro, small, medium enterprise may apply online MSME / Udyog Aadhaar registration. Someone who belongs to Proprietorship, Hindu Undivided Family (HUF), and One Person Company (OPC), Partnership Business, Limited Liability Partnership (LLP), Private Limited or Limited Company, Co-operative Societies or any other group of individuals can easily apply for Micro, Small & Medium Enterprise.
The purpose to include all wide categories of enterprises for registration under this Act, is to ensure that the benefits offered by Government reaches to large portion of Society.

11. What are the Documents Required for Udyam Registration?

Ans: - The user will only need to provide their 12-digit Aadhaar Number, Pan Card and Bank Account details of Business for the registration process.

12. Do existing enterprises require to be registered under new Udyam registration?

Ans: - Yes, all the existing enterprises are required to be registered under new process Udyam registration.

13. What is MSME Registration?

Ans: - A Micro, Small and Medium Enterprises (MSME) Development Act, 2006 became operational on October 02, 2006. The act facilitates / boosts the promotion, development and enhancing the competitiveness of micro, small and medium enterprises. These include start-ups and other business initiatives which are comparatively small in budget and have limited operations.
The Enterprises are classified in 2 category

• Manufacturing enterprises – engaged in the manufacturing or production of goods in any industry
• Service enterprises – engaged in providing or rendering services.

As per New Scheme ‘Atma Nirbhar Bharat Abhiyan’ or the Self-Reliant India Scheme for the year 2020 by the Government of India has provided a new definition for MSMEs.
As per new definition of MSME turnover to define MSMEs
Investments will no longer characterize MSMEs. In October 2019, Union Minister Nitin Gadkari had said that the revised definition of micro, small, and medium enterprises may grant a unified description for all things related to taxation, investment and more.

14. Is there any provision for grant of composite loans by banks?

Ans: - A composite loan limit of Rs.1crore can be sanctioned by banks to enable the MSME entrepreneurs to avail of their working capital and term loan requirement through Single Window in terms of RBI Master Circular on lending to the MSME sector dated July 1, 2010. All scheduled commercial banks have been advised by our circular RPCD.SME&NFS. BC.No.102/06.04.01/2008-09 on May 4, 2009 that the banks which have sanctioned term loan singly or jointly must also sanction working capital (WC) limit singly (or jointly, in the ratio of term loan) to avoid delay in commencement of commercial production thereby ensuring that there are no cases where term loan has been sanctioned and working capital facilities are yet to be sanctioned. These instructions have been reiterated to schedule commercial banks on March 11, 2010.

15. What support is provided by the Ministry for improving manufacturing competitiveness?

Ans: - The National Manufacturing Competitiveness Programme (NMCP) is the nodal programme of the Government to develop global competitiveness among Indian MSMEs. The Programme was initiated in 2007-08. This programme targets at enhancing the entire value chain of the MSME sector through the following schemes: (a) Lean Manufacturing Competitiveness Scheme for MSMEs;
(b) Promotion of Information & Communication Tools (ICT) in MSME sector;
(c) Technology and Quality Up gradation Support to MSMEs;
(d) Design Clinics scheme for MSMEs;
(e) Enabling Manufacturing Sector to be Competitive through Quality Management Standards (QMS) and Quality Technology Tools (QTT);
(f) Marketing Assistance and Technology Up gradation Scheme for MSMEs;
(g) Setting up of Mini Tool Room under PPP Mode;
(h) National campaign for building awareness on Intellectual Property Rights (IPR);
(i) Support for Entrepreneurial and Managerial Development of SMEs through Incubators.
(j) Bar Code under Market Development Assistance (MDA) scheme.

16. What support is provided by the Ministry to improve quality of products produced in MSME sector?

Ans: - The TEQUP scheme envisages another activity, namely, Product Quality Certification. The main objective of this scheme is to encourage MSMEs to Acquire Product Certification Licenses from National / International Bodies, thereby improving their competitiveness. The primary objective of this activity is to provide subsidy to MSME units towards the expenditure incurred by them for obtaining product certification licenses from National / International standardization Bodies. Under this Activity, MSME manufacturing units will be provided subsidy to the extent of 75% of the actual expenditure, towards licensing of product to National/International Standards. The maximum GOI assistance allowed per MSME is Rs.1.5 lakh for obtaining product licensing /Marking to National Standards and Rs. 2.0 lakh for obtaining product licensing /Marking to International standards. One MSME unit can apply only once under the scheme period.

17. Whether there is any scheme for assisting MSMEs for Intellectual Property Rights?

Ans: - Under the National Manufacturing Competitiveness Programme (NMCP) to enhance the competitiveness of the SMEs sector, O/o DC (MSME) is implementing a scheme “Building Awareness on Intellectual Property Rights (IPR)” for the MSME. The objective of the scheme is to enhance awareness of MSME about Intellectual Property Rights (IPRs) to take measure for the protecting their ideas and business strategies. Accordingly, to enable the MSME sector to face the present challenges of liberalisation, various activities on IPR are being implemented under this scheme.

18. What is the validity of Udyam Registration Certificate?

Ans: - In the new registration portal, it is not specifically mentioned anywhere in the Act as well in the notifications issued by the Ministry that the Udyam Registration Certificate will be valid for certain period of time like 5 years, 10 years etc.
Therefore, it can presume that the registration is valid till the existence of Enterprise and there is no requirement for renewal.
However, Enterprises have to update the information as required on new portal including PAN and GST on or before March 31, 2021.

19. What are the guidelines for delayed payment of dues to the MSE borrowers?

Ans: - With the enactment of the Micro, Small and Medium Enterprises Development (MSMED), Act 2006, for the goods and services supplied by the MSME units, payments have to be made by the buyers as under: The buyer is to make payment on or before the date agreed on between him and the supplier in writing or, in case of no agreement, before the appointed day. The agreement between seller and buyer shall not exceed more than 45 days. If the buyer fails to make payment of the amount to the supplier, he shall be liable to pay compound interest with monthly rests to the supplier on the amount from the appointed day or, on the date agreed on, at three times of the Bank Rate notified by Reserve Bank. For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the interest as advised at above. In case of dispute with regard to any amount due, a reference shall be made to the Micro and Small Enterprises Facilitation Council, constituted by the respective State Government. To take care of the payment obligations of large corporate borrowers to MSEs, banks have been advised that while sanctioning/renewing credit limits to their large corporate borrowers (i.e. borrowers enjoying working capital limits of Rs. 10 crore and above from the banking system), to fix separate sub-limits, within the overall limits, specifically for meeting payment obligations in respect of purchases from MSEs either on cash basis or on bill basis. Banks are also advised by RBI to closely monitor the operations in the sub-limits, particularly with reference to their corporate borrowers’ dues to MSE units by ascertaining periodically from their corporate borrowers, the extent of their dues to MSE suppliers and ensuring that the corporate pay off such dues before the ‘appointed day’ /agreed date by using the balance available in the sub-limit so created.

20. Is there any renewal provision of MSME registration?

Ans: - As per Notification dated June 26, 2020, Udyam Registration Number is a permanent identity number and there will be no need for renewal of Registration.

21. How to calculate investment in Plant and Machinery or Equipment?

Ans: - The value of Investment in Plant and Machinery or Equipment is linked with the Income Tax returns filed in the previous years under the Income Tax Act, 1961.
In case new enterprise, where no prior ITR is available, the value of investment will be based on self-declaration basis and this relaxation shall end after the 31st March of the financial year in which it files its first ITR.
The calculation of investment in Plant and Machinery or Equipment shall be in accordance with the Notification issued by Ministry of Small-Scale Industries dated October 05, 2006.

22. What are the chances of rejection of Online MSME Application?

Ans: - The application will be approved on the basis of the information provided by the applicant.

23. How to calculate turnover of Goods and Services?

Ans: - The information of turnover is linked to the Income Tax Act or the Central Goods and Services Act (CGST Act) and the GSTIN. As per Notification dated June 26, 2020, Exports value of goods or services or both are excluded for calculation of Turnover.

24. What is the support available for cluster development?

Ans: - The Ministry is implementing the Micro and Small Enterprises – Cluster Development Programme (MSE-CDP) wherein support is provided for Diagnostic Study; Soft Interventions like general awareness, counselling, motivation and trust building, exposure visits, market development including exports, participation in seminars, workshops and training programmes on technology upgrading etc.; Hard Interventions like setting up of Common Facility Centres (Common Production/Processing Centre, Design Centre, Testing Centre etc.) and creation/up gradation of infrastructural facilities in the new/existing industrial areas/ clusters of MSEs.

25. Can the MSE borrowers get collateral free loans from banks?

Ans: - In terms of RBI circular, banks are mandated not to accept collateral security in the case of loans upto Rs 10 lakh extended to units in the MSE sector. Further banks may, on the basis of good track record and financial position of MSE units, increase the limit of dispensation of collateral requirement for loans up to Rs.25 lakh with the approval of the appropriate authority.

26. Is there support available for obtaining ISO certification?

Ans: - The Ministry is implementing the ISO: 9001/14001/HACCP Certification Reimbursement Scheme for Micro & Small Enterprises (MSEs) for reimbursement of certification expenses, only to those MSEs which have acquired Quality Management Systems (QMS)/ISO 9001 and /or Environment Management Systems (EMS)/ ISO14001and / or Food Safety Systems (HACCP) Certification. Under the scheme provides reimbursement of 75% of the certification expenses up to a maximum of Rs.75,000/- (Rupees seventy five thousand only) to each unit as one-time reimbursement only to those MSEs which have acquired Quality Management Systems (QMS)/ISO 9001 and /or Environment Management Systems (EMS)/ ISO14001and / or Food Safety Systems (HACCP) Certification.

27. What support is provided by the Ministry for assisting training institutions?

Ans: - The Ministry is implementing the Assisting to Training Institutions Scheme which envisages financial assistance for establishment of new institutions (EDIs), strengthening the infrastructure of the existing EDIs and for supporting entrepreneurship and skill development activities. The main objectives of the scheme are development of indigenous entrepreneurship from all walks of life for developing new micro and small enterprises, enlarging the entrepreneurial base and encouraging self-employment in rural as well as urban areas, by providing training to first generation entrepreneurs and assisting them in setting up of enterprises. The assistance shall be provided to these training institutions in the form of capital grant for creation/strengthening of infrastructure and programme support for conducting entrepreneurship development and skill development programmes.

28. Can an enterprise have more than one Udyam Registration Number?

Ans: - As per Notification dated June 26, 2020, no enterprise shall have more than one Udyam Registration Number, if an Enterprise is involving in both manufacturing and service, then both the activities will be clubbed in one Udyam Registration.

29. Is credit rating mandatory for the MSE borrowers?

Ans: - Credit rating is not mandatory but it is in the interest of the MSE borrowers to get their credit rating done as it would help in credit pricing that is cost of funds (interest and other charges etc.) of the loans taken by them from banks.

30. Is it mandatory for every Entity to have PAN and GSTIN?

Ans: - As per Notification dated June 26, 2020, all the Enterprises seeking registration under the Act, requires to mandatory have PAN and GSTIN on and after April 01, 2021. However as per relevant provision of the Central Goods and Services Tax Act, 2017, and respective GST Laws, the Enterprises requires registration on crossing certain threshold limit mentioned in the Act. But this notification seems the exception of GST laws provision and every enterprise irrespective of turnover, mandatorily have GSTIN and PAN for registration under the Act. If the Enterprise do not obtain PAN and GSTIN, then its liable for suspension of its status as Micro, Small and Medium Enterprise on and after April 01, 2021.

31. What support is provided by the Ministry to promote energy conservation in the manufacturing process for SMEs?

Ans: - The Ministry implements the “Technology and Quality Up gradation Support to Micro, Small and Medium Enterprises (TEQUP)” which focuses on two important aspects, namely, enhancing competitiveness of MSME sector through Energy Efficiency and Product Quality Certification. The basic objective of this scheme is to encourage MSMEs in adopting energy efficient technologies and to improve product quality of manufacturing in MSMEs. It is a well-known fact that energy consumption is a significant component in the cost structure of almost any manufacturing/ production activity. Adopting energy efficient technologies curtails the cost of energy there by reducing production cost and increasing competitiveness. Under this scheme, a capital subsidy of 25% of the project cost subject to a maximum of Rs. 10.00 lakh shall be provided to the registered MSME units. While 25% of the project cost will be provided as subsidy by the Government of India, the balance amount is to be funded through loan from SIDBI/banks/financial institutions. The minimum contribution as required by the funding agency will have to be made by the MSME unit.

32. What support is provided by the Ministry to improve design of products produced in MSME sector?

Ans: - The Ministry implements the Design Clinic Scheme for Design Expertise to Micro, Small and Medium Enterprises (MSME) Sector is to improve the design of the product to meet global challenges and compete with similar products domestically and internationally. It is launched to benefit MSMEs by creating a dynamic platform to provide expert solutions to real time Design problems and add value to existing products. The goal of this scheme is to help MSME manufacturing industries move up the value chain by switching the production mode from original equipment manufacturing to original design manufacturing and hence original brand manufacturing. In the Design Clinic scheme, the value additions to an idea or a concept are imparted through interaction at a lesser cost to a specific industry/sector. The expected outcome of such interventions is new product development by design improvement and value addition for existing products.

33. What support is provided by the Ministry for promotion of Information & Communication Tools (ICT) in MSME Sector?

Ans: - The Ministry implements the Information and Communication Technology (ICT) scheme to encourage and assist Indian MSMEs to adopt ICT Tools and Applications in their production and business processes, and thereby improve their productivity and competitiveness in National and International Market.

34. In case an Enterprises ceases to Medium Enterprise, is it required to surrender the Certificate to MSME Authority?

Ans: - As per Notification dated 26th June, 2020 issued by Ministry of Micro, Small and Medium Enterprises it is not mentioned anywhere in the Act that once the Enterprise ceases to be MSME enterprise, it has to surrender its certificate, however if the Entity fails to update the relevant information on the portal then it liable for suspension of its status.

35. Is Registration of MSME / Udyog Aadhaar replaced with Udyam Registration?

Ans: - Yes, MSME / Udyog Aadhaar registration is replaced with Udyam Registration. As per notification of MSME dated 26.06. 2020, Udyam Registration is the new process of MSME/UDYOG AADHAAR Registration launched by the Ministry of Micro, Small and Medium Enterprises effective from July 1, 2020. This will now be known as Udyam, according to a notification published on 26 June 2020 by the Ministry of Micro Small and Medium Enterprises (MSME). The new method of registration began on July 1st 2020.

36. Is it mandatory for enterprise to get registered under MSME Act?

Ans: - Yes, MSME / Udyam registration is mandatory in India. While the enterprises have to obtain Udam Registration, the RBI has also made it mandatory for the lenders to ensure that their MSME borrowers have obtained the registration.

37. What is registration process for Existing Enterprises?

Ans: - The registration process for Existing Enterprises is below:
All existing enterprises registered under EM–Part-II (Entrepreneurs Memorandum) or UAM (Udyog Aadhar Memorandum Portal) shall register again on the Udyam Registration portal on or after the 1st day of July, 2020. All enterprises registered till 30th June, 2020, shall be re-classified in accordance with this notification.
The existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for a period up to the 31st day of March, 2021. d. An enterprise registered with any other organization under the Ministry of Micro, Small and Medium Enterprises shall register itself under Udyam Registration.

38. What is the Role of MSME in Indian Economy?

Ans: - MSMEs are an important sector in the Indian economy and Its play a key role in economic and national development. They not only create jobs but also work together to develop backward and rural communities. As per the Government annual report (2018-19), presently there are 6 08,41,245 MSMEs in India.
With a hope of the to create five crore job opportunities in the MSME sector, the Government had announced about making changes to the MSME, where turnover will define an MSME, and not based on investment put into it.
Since its inception, part of MSME has proven to be India's most powerful economic sector. MSME manufactures and manufactures a wide range of products in the domestic and international markets.
The Government of India has taken several initiatives to holistically develop the MSMEs of the country this includes benefits for them, as well as, initiatives for their smooth working and upgrade industries. MSMEs also contribute to and play an important role in the country's development in various areas such as low investment requirements, operational flexibility, mobility, low import rates, and high contribution to domestic production. MSMEs have played a key role in providing employment opportunities in rural areas. They have assisted in the industrialization of these areas at a lower cost compared to the larger industries. Acting as a co-operative unit in the major sectors, the MSME sector has played a major role in social and economic development. With the strength and power to develop local technologies, provide strong competitiveness in the domestic and international markets, technology industries, contribute to building defence equipment, and produce new entrepreneurs by providing information, training and skills development skills through specialized training institutions.

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