Who is qualified for being MSM Enterprises.

• any enterprise engaged in the manufacture or production of any goods or providing any service with certain investment in equipment and having turnover
• enterprise may be of any constitution be it a proprietorship, partnership, LLP or company

What are the criteria – should it be manufacturing or service sector classified into

• Micro (Investment Less than 1 Crore Turnover Less than 5 Crore)
• Small (Investment Less than 10 Crore Turnover Less than 50 Crore)
• Medium (Investment Less than 50 Crore Turnover Less than 250 Crore)
• Since word AND is added between both the conditions hence both the condition is cumulative accordingly bifurcation will be made
• Case 1: So if investment is 51 cr and T/o of Co is 100cr, it is not MSME
• Case 2: If the investment is 9cr and T/O of Co is 60 cr it is medium

Whether export turnover is included

Though the press release had clarified that turnover shall not include export turnover but no such exclusion has been found in the notification issued on 01/06/2020.

Which Industries are included

There are 38 types of industries in the first schedule to the IDR Act, 1951. AND enterprises engaged in the service sector can also register themselves as MSME.

What are benefits of MSME

Various types of schemes which the central or state government can launch for the benefit of MSME units . https://msme.gov.in/all-schemes

Delayed Payment to MSME

• Every person who is buying goods or services from MSME units has to make payment to MSME units on or before the due date. If no due date is mentioned or due date is beyond 45 days from purchase date then deemed due date shall be maximum 45 days from the date of purchase. If payment is made after 45 days then the buyer has to make payment compulsorily with interest. Rate of interest shall be THREE times of the bank rate of SBI.
• In case of dispute between parties any party may refer the dispute to Micro and Small Enterprises Facilitation Council, Council shall either itself conduct conciliation or seek assistance of any institution Sec 65-81 of Arbitration and Conciliation Act, 1996 shall apply, if conciliation not successful then reference to institution providing alternate dispute resolution system and such reference shall be decided within 90 days.
• Application for setting aside decree, award or order can be made to a Court by the buyer after depositing 75% of the amount in terms of the decree in the manner directed by the Court.
• Obligation for presentation of outstanding dues of MSME in Annual Accounts of buyer

It is pertinent to note here that this benefit is available only to micro and small enterprises and not medium enterprises and as the definition of buyer and seller in the Act does not contain the word medium enterprises.

Whether interest paid to the seller under MSME is allowable under Income tax

Sec 23 of MSMED Act, any interest paid or payable under this Act shall not be allowable as admissible expenses under the Income Tax Act.

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