New Classification of MSMES Notified

New Classification of MSMES Notified

The Ministry of Micro, Small and Medium Enterprises (MSME Ministry) vide its notification dated June 01, 2020 has revised the basis for classification of micro, small and medium enterprises. In addition to the investment in plant and machinery/equipment, the enterprises also needs to look at their ‘annual turnover’ to determine the category applicable to them. Further, the MSME Ministry has done away with the separate threshold limits for manufacturing and service enterprises.

The new classification of MSMEs will come into effect from July 1, 2020.

It is important to note that with the new classification, both investment as well annual turnover are relevant. New thresholds for classifying an enterprise into micro, small and medium category are as under:

As part of ease of doing business initiative, the MSME Ministry has simplified the process of MSME registration and launched web-based interface (, wherein the enterprises falling under the aforesaid categories can apply for Udyog Aadhaar/MSME registration. The Udyog Aadhaar/MSME registered enterprises are entitled to various benefits such as protection against delay in payment, collateral free loans from the banks, fast resolution of disputes, reduced rate of interest from banks, exemptions while applying for Government tenders


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