Saturday 15 August 2020

Business Activities not covered under MSME

 


 

BUSINESS ACTIVITIES NOT COVERED UNDER MSME FOR REGISTRATION

 

Activites (NIC codes) not covered under MSMED Act, 2006 for registration as "Udyam Registration Certificate), while earlier it was called Udyog Aaadhaar Memorandum (UAM).

All enterprises which are doing activities (NIC Code List) are eligible for MSME registration under Udyam.

But there are some activities, which are clearly mentioned by the Ministry of MSME will not be eligible for MSME registration. If any of the mentioned activity is being run by any enterprise, then that enterprise will not be registered under any category of MSME.

 

Below mentioned is the detailed list of activities excluded from MSME eligible activities.

As per office memorandum dated 17th July, 2020 regarding "Udyog Aadhaar Memorandum (UAM)" is replaced with "Udyam Registration Certificate" in the office memorandum dated 27th June 2017 issued by Ministry of Micro, Small & Medium Enterprises with immediate effect. 

Hence as office memorandum issued on 27th June June 2017 applicable for UAM will now applicable for Udyam Registration Certificate.

As per office memorandum dated 27th June 2017 that 

Sub Section 1 of Section 7 of Micro Small or Medium Enterprises Development Act, 2006 provides for classification of enterprises engaged in manufacturing or production of goods as well as enterprises engaged in providing or rendering of services as micro, small or medium based on investment in plant and machinery and equipment respectively. 

Sub Section 1 of Section 8 provides that any person who intends to establish a micro or small or medium enterprise engaged in manufacture or production of goods or providing or rendering of services may at his discretion shall file a memorandum of micro, small or medium enterprises in accordance with the provisions of Act. 

Subsequent notification no SO 85(E) dated 10th January, 2017 for registration of Udyog Aadhaar Memorandum for Micro, Small or Medium enterprises.

Subsequent notification no S.O. 2119 (E) dated 26th June, 2020 for classification of enterprises & Udyam Registration for Micro, Small or Medium enterprises.

In this context it is further clarified that the activities in Table 1 below would not be included in the manufacturing or providing services in accordance with Section 7 of the MSMED Act, 2006:-

 

Table 1

NIC Code

Activity

02

Forestry and logging

03

Fishing and aquaculture

45*

Wholesale and retail trade and repair of motor vehicles and motorcycles

46*

Wholesale trade except of motor vehicles and motor cycles 47

47*

Retail Trade except of Motor Vehicles and motor cycles

97

Activities of household as employees for domestic personnel.

98

Undifferentiated goods and services producing activities of private households for own use

99

Activities of extraterritorial organization and bodies

 * As per Ministry of MSME's Office Memorandum dated 2nd July, 2021 has decided to include Retail and Wholesale trade as MSMEs for the limited purpose of Priority Sector Lending and they would be allowed to be registered on Udyam Registration Portal for the NIC Codes 45, 46 & 47 and activities mentioned as above.


The NIC 2 digit activity 01 – crop, animal production, hunting and related activities would also not be included as per Section 7 of the Act except for the sub-classes of activities as 5-digit level given in Table 2 below:


Table 2

NIC Code

Activity

01462

Production of eggs

01463

Operation of poultry hatcheries

01492

Bee-keeping and production of honey and beeswax

01493

Raising of silk worms, production of silk worm cocoons

01612

Operation of agricultural irrigation equipment

01620

Support activities for animal production

01631

Preparation of crops of primary markets i.e. cleaning, trimming, grading disinfecting

01632

Cotton ginning, cleaning and bailing

01633

Preparation of tobacco leaves

01639

Other post-harvest crop activities, n.e.c

01640

Seed processing for propagation

Activities mentioned in Table 2 above are covered for MSME registration.

 

Conclusion:-

It is concluded from above that before going for Udyam registration for MSME check the activity of enterprise. Whether its activity is covered under list of eligible activity for MSME or excluded from the eligible activity by office memorandum mentioned above.

If enterprise activity comes under eligible list then only go for MSME registration under Udyam.


 

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DISCLAIMER:- THE ARTICLE HAS BEEN WRITTEN BY SUDHIR ARYA, COMPANY SECRETARY IN PRACTICE & STARTUP CONSULTANT. DUE CARE HAS BEEN TAKEN TO ENSURE THE CORRECTNESS OF INFORMATION. IT'S BASED ON THE RELEVANT INFORMATION AVAILABLE AT THE TIME OF WRITING IT. HOWEVER, THIS ARTICLE CAN'T BE CONSTRUCTED AS LEGAL OPINION AND WRITER WILL NOT BE LIABLE FOR ANY DIRECT OR INDIRECT RESULT FROM THIS ARTICLE. THIS ARTICLE IS ONLY FOR KNOWLEDGE SHARING INITIATIVE.

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