Ease of Doing Business for MSMEs: The MSME Ministry has responded to MSMEs’ concerns about selecting the financial year for giving data on investment, turnover, and export value in order to be classified as an MSME when registering their businesses on the new Udyam Registration platform. The Udyam portal’s classification of MSMEs went into effect on July 1, 2020, when the platform was first launched. Last year, the government updated the MSME definition to include additional businesses that were previously outside the MSME sector in post-Covid benefits.
“The Ministry of MSME has received a number of representations from MSMEs, industry associations, and other MSME stakeholders with respect to the selection of the year of data in respect of Investment and Turnover, as well as the export value for the MSME classification while registering on Udyam Porta,” the September 29, 2021 clarification read.
According to the government, the data that is auto-filled or fetched (for businesses that have filed IT and GST returns) from the IT Department and the Goods and Service Tax Network (GSTN) is data that has been finalised by the two departments after any necessary rectifications for the relevant financial year. The question, on the other hand, was about determining the fiscal year in order to select relevant data for registration on the new portal.
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According to the MSME classification, a company is deemed an MSME if its annual revenue is less than Rs 250 crore. The categorization was announced in May of last year, and there was some misunderstanding over which financial year MSMEs should use to give data for registration on the platform – FY19 or FY20. If a company must decide whether it is an MSME or not, the results of FY19 must be considered. This means that if a company registered on the portal last year and had a turnover of less than Rs 250 crore in FY19, it will be considered an MSME even if the turnover in FY20 is higher,” said Umesh Balani, MD and CEO of Rotomag Motors and Controls and Chairman of Assocham’s MSME Development Council.
Furthermore, due to Covid-related issues, the deadline for completing GST and IT reports was extended last year, despite the fact that the government generally requests that the returns be filed by September or October. As a result, for registration for the last financial year 2020-21, data for FY19 was used because data for FY20 wouldn’t have been available until December. The administration clarified this in its note.
“The deadline for filing the IT Return for FY19 was July 2019, and additional processing time may be required.” Companies/enterprises will have their accounts audited and finished by October or November 2019. In addition, the GST Return process for the Financial Year 2018-19 follows a similar schedule. As a result, for MSME registration and categorization in 2020-21, frozen data from 2018-19 has been used,” the statement stated. Similarly, data from FY20 will be used for FY22 registrations, while data from FY21 will be used for FY23 registrations.
“The deadlines for filing GST and IT returns have been extended.” The deadline for filing a return for an MSME was December 31, not July last year. As a result, the government is using FY19 data rather than FY20 data, which arrived late for MSMEs that registered last year. Similarly, there will be no GST or IT return data for FY21 if I register for registration today. So, of course, the government would have to use statistics from FY20,” Rajiv Chawla, Chairman of the MSME organisation IamSMEofIndia, told Financial Express Online.
(With inputs from The Financial Express.)
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