Micro, small and medium enterprise udyam registration calculation and benefit.

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Micro, small, and medium businesses contribute significantly to the Indian economy by producing jobs opportunities and encouraging entrepreneurship, they have made a significant contribution to the country socio economic development.

Advice on calculating the cost of an investment in plant, machinery, or equipment.

1. The income tax return for the previous year, filed under the Income Tax Act of 1961, will be used to calculate the investment in plants and machinery or equipment.

In case of a new enterprise, where no prior income tax return is available, the investment will be based on self-declaration of the promoter of the enterprise and such relaxation shall end after the 31st of  March of the financial year in which it files its first income tax return.

To be clear, the cost of pollution control, research and development, industrial safety equipment, and other items that may be specified by notification is not included in the calculation of plant and machinery investment.

The income tax shall be connected to the guidance on the computation of Turnover Information in terms of turnover and exports turnover for an enterprise act or the central goods and services act and the goods and services tax identification number.

Exports of goods or services or both shall be excluded while calculating the turnover for the purpose of classification, every enterprise, whether micro, small, or medium, qualifies.

The turnover related figures of such enterprises which do not have permanent account numbers will be considered on a self-declaration basis for a period up to 31st of March, 2021, and thereafter, permanent account number and goods services tax identification number shall be mandatory.

2.Enterprise registration in Udyam.

The registration is completed online on the basis of self-declaration. Form for registration is available on the udyam registration portal website  https://udyamregistration.gov.in/governmentindia/ministrymsmeregistration.html.

Currently, the registration is divided into the following ways.

For the new entrepreneurs who have not yet registered as micro, small and medium enterprise or for those with enterprise memorandum.

For those who already having registration as udyog aadhaar memorandum.

There is no cost or price associated with registering for udyam.

Following are the requirements for registration.

Aadhar Number.

Sole proprietary. In this case, aadhar would be the proprietor.

Partnership firm. In this case, aadhar would be the managing partner.

Hindu undivided family. In this case, aadhar would be of the karta.

Company, trust, society, limited liability partnership, or cooperative society aadhar would be of the authorised signatory.

The social category of the authorised person.

Name and type of the enterprise. Type proprietary partnership firm company or likewise.

Permanent account number of the enterprise.

Registered business address.

Plant name and address if available.

Bank details  that is bank name, bank account number and  Indian financial system  Code.

Date of incorporation and date of commencement of business.

Number of employees that is male, female and others.

National industry classification code basis the activity of the enterprise.

Amount of investment in plant and machinery and  equipment substainlly.

Amount of turnover calculated perfectly.

Once all the pre requisite details are filled and after successful registration, a reference Number will get generated using which, the udyam certificate can be saved or  downloaded.

As per notification dated 26th of June, 2020, issued by the ministry of micro,small and medium enterprise , all existing businesses that were registered before June 30, 2020 will be reclassified based on a composite of investment and turnover requirements for categorization as a micro, small, or medium business. Existing businesses must register under the udyam registration system. Existing businesses that were registered before June 30, 2020, will only be valid for one year, from March 31, 2021 to June 30, 2020.

3. Benefits of micro,small and medium enterprise udyam registration.

Following is an illustrative list of benefits available to enterprises registered as micro,small and medium enterprise.

Defend yourself from late payments.

If a buyer delays, the payment for more than 45 days, the enterprise that is  micro, small and medium  enterprise is eligible to charge compound interest.

Subsidy for the filing of patents.

Patent registration is subsidised for businesses established under the micro, small, and medium enterprise legislation. This is obtained by submitting an application to the appropriate ministry.

Also, read: udyam registration at a reasonable cost

Electricity bills are discounted very much or  substainlly.

By submitting an application and a copy of their registration certificate, micro, small, and medium businesses can get a discount on their electricity bills.

Overdraft interest rate exemption totally.

Enterprise registered under micro,small and medium enterprise can avail a benefit of 1 per cent on the overdraft, as described in a system that varies per bank.

International standards organization certification charges reimbursement.

The expenses for the international standards organisation certification can be claimed back by the registered micro, small, and medium firm.

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