New Upcoming Legal Jobs Free Workshop March 11 at 5 PM. Register here

    Question

    With respect to the revised definition of MSME,

    consider the following statements:   (1) The new definition of MSMEs is based on two criteria: Investment in the plant/machinery and the Annual Profit of the Enterprise. (2) Maximum limit of the investment in plant & machinery for Small Enterprises is Rs 50 crores (3) The revised definition follows common criteria for manufacturing and services enterprises. (4) Value of Exports is not included in the annual turnover of the enterprise for the purpose of classification into Micro, Small and Medium.   Which of the above statement(s) is/are INCORRECT?
    A 4 only Correct Answer Incorrect Answer
    B 1 and 2 only Correct Answer Incorrect Answer
    C 3 and 4 only Correct Answer Incorrect Answer
    D 1,2 and 4 only Correct Answer Incorrect Answer
    E 1 and 3 only Correct Answer Incorrect Answer

    Solution

    Government includes Retail and Wholesale Trade as MSMEs ● Govt. has decided to include Retail & Wholesale trade under the definition of MSME (Micro, small and medium enterprises) from 2nd July. Accordingly, they are now eligible to get the benefit of priority sector lending under RBI guidelines. ● Definition of MSME: ○ The government had revised the definition of MSME last year. The revised definition came into effect from 1st July 2020. ○ The revised definition follows composite criteria for manufacturing and services enterprises. Earlier, the definition was different for the manufacturing & Service sectors, this distinction is now eliminated. ○ The new definition of MSMEs is based on two criteria: i. Investment in the plant /machinery /equipment ii. Turnover of the enterprise ○ As part of the new definition, Exports will not be counted in turnover for any enterprise whether micro, small or medium. Micro-Enterprises - Enterprises with investments up to Rs 1 crore and turnover up to Rs 5 crore are classified as micro-enterprises Small Enterprises -Enterprises with investment up to Rs 10 crore and turnover up to Rs 50 crore are classified as Small Enterprises Medium Enterprises -Enterprises with investment up to Rs 50 crore and turnover up to Rs 250 crore are classified as medium enterprises.

    Practice Next