Ministry of Micro, Small & Medium Enterprises
Development of MSME Sector
Posted On: 01 AUG 2024, 5:03 PM by PIB Delhi
The Government of India has implemented several measures to foster the development of the Micro, Small, and Medium Enterprises (MSME) sector. The key initiatives are detailed below:
- On 26th June 2020, new criteria for the classification of MSMEs were introduced, based on investment and turnover, with higher thresholds. This aims to widen the scope of the MSME sector.
- Global tenders are no longer applicable for procurements up to Rs. 200 crores, promoting local businesses.
- Launched on 1st July 2020, this initiative simplifies the registration process for MSMEs, enhancing the Ease of Doing Business.
- Introduced on 11th January 2023, this platform aims to bring informal micro enterprises into the formal sector.
- Effective from 2nd July 2021, retail and wholesale traders are included as MSMEs for credit purposes.
- These benefits are extended for three years in the event of an upward change in the status of MSMEs.
- This portal facilitates the filing of grievances and monitors outstanding dues to micro and small enterprises from buyers of goods and services.
- Launched in June 2020, this online portal addresses various aspects of e-governance, including grievance redressal and support for MSMEs.
GST and Taxation Facilitation
According to the Goods and Services Tax Council Secretariat, certain enterprises are exempt from obtaining GST registration based on their turnover:
- Persons involved in intra–state taxable supply of goods, if aggregate turnover in a financial year does not exceed ₹ 40 Lakh.
- Persons involved in intra–state or inter-state taxable supply of services, if aggregate turnover in a financial year does not exceed ₹ 20 Lakh.
To ease the compliance burden of monthly returns, several facilitation measures have been introduced. The Composition Levy Scheme in GST is designed for small and medium taxpayers with turnovers within specified limits. Suppliers of goods with an annual turnover up to Rs. 1.5 crore and suppliers of services with an annual turnover up to Rs. 50 lakhs can opt for this scheme. Under the scheme, tax is paid quarterly based on a declaration, without the need for elaborate accounts, and only one annual return is required.
Income Tax Provisions
As per the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, the Income Tax Act, 1961, does not impose specific penalties solely on MSMEs.
This comprehensive information was provided by the Minister of State for Micro, Small, and Medium Enterprises, Sushri Shobha Karandlaje, in a written reply in the Lok Sabha today.
