Classification of Micro Small and Medium Enterprises
Definitions of Micro, Small & Medium Enterprises In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes- (1) Manufacturing Units and (2) Service Units
MSME sector has been raising a demand for revision / amendment in the MSME definition. Now the Cabinet has approved a draft which proposes to change the definition of MSMEs. Now the definition has changed classification of MSME from Investment in Plant & Machinery to define MSMEs on the basis of annual sales turnover. There is no distinction between manufacturing and service units.
The revised classification of MSME is Turnover based-
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Particulars
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Micro Enterprises
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Small Enterprises
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Medium Enterprises
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Manufacturing Units/Service Units
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Turnover up to Rs. 5.00 Crore
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Turnover Rs. 5.00 crore to 75.00 crore
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Turnover Rs. 75.00 crore to Rs. 250 Crore
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Earlier these were classified based on investment in Plant & Machinery (excluding investments in land and building)-
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Particulars
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Micro Enterprises
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Small Enterprises
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Medium Enterprises
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Manufacturing Units
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Investment up to Rs. 25.00 lakh
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Investment from Rs. 25.00 lakh to Rs. 5.00 Crore
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Investment from Rs. 5.00 Crore to Rs. 10.00 Crore
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Service Units
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Investment up to Rs. 10.00 lakh
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Investment from Rs. 10.00 lakh to Rs. 2.00 Crore
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Investment from Rs. 2.00 Crore to Rs. 5.00 Crore
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Benefits of MSME Registration
- Higher creditability- MSME registered units get higher preference as compared to non-registered units.
- Lower rate of Interest- the bank loans become lower than interest on regular loans.
- Tax Rebate- There are various tax rebates offered to MSME.
- MAT credit utilized enhanced- It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
- Opportunities like apply to government tenders etc.