MSMEs Can Continue To Avail Non-Tax Benefits: Govt

An enterprise may continue to benefit from all non-tax benefits of the category it was in prior to the reclassification for three years from the date of such upward change, according to a notification from the Ministry of MSME, in the event of reclassification due to investments in plant and machinery or equipment, turnover, or both.

Following the reclassification, micro, small, and medium - sized enterprises will still be able to avail of all non-tax benefits applicable to those categories for three years, the government announced on Wednesday.

"This decision has been taken after due deliberations with MSME stakeholders and is in line with the Aatma Nirbhar Bharat Abhiyan. The Ministry of MSME, Government of India, has allowed those registered MSMEs to continue to avail of non-tax benefits for three years, instead of one year, in case of upward graduation in their category and consequent reclassification,"  It was stated in a statement.

In accordance with the Micro, Small & Medium Enterprises Development (MSMED) Act of 2006, the Government of India introduced the term MSME (Micro, Small and Medium Enterprise). The Ministry of MSME (MoMSME) is responsible for the development and management of MSME, which consists of organisations that produce, manufacture, process, or preserve goods and commodities.

MSME sector, which makes up almost 27% of India's GDP, is regarded as the foundation of the Indian economy. It largely aids in the development of residents of rural and underdeveloped areas. According to government statistics as of April 30, 2022, there are currently more than 6.33 crore MSMEs across the country, which employ roughly 11.10 persons.