Which of the following is excluded when calculating the investment in plant and machinery or equipment for an enterprise?  

Guidelines for calculating Investment in Plant & Machinery for MSME classification:   The meaning of “plant and machinery or equipment”   This shall have the same meaning as assigned to the plant and Machinery in the Income Tax Rules, 1962, framed under the Income Tax Act, 1961.  

• The investment shall include only all tangible assets . This excludes land and building, furniture & fittings.  
• The investment does not include intangible assets such as goodwill, intellectual property, etc.  

Calculating Investment in Plant & Machinery for Existing Enterprises  

• Investment in Plant and Machinery will be estimated per the Income Tax Return filed for previous years.  
• The written down value of the aforesaid tangible assets shall be considered as mentioned in the latest ITR filing (i.e., March 31).  

Calculating Investment in Plant & Machinery for New Enterprise  

• In the case of a new enterprise, where no prior ITR is available, the investment shall be based on the self-declaration of the promoter of the enterprise, and such relaxation shall end after March 31 of the financial year in which it files its first ITR.  
• The purchase (invoice) value of a plant and Machinery or equipment, whether first hand or second hand, shall be taken into account, excluding Goods and Services Tax (GST), on the self-disclosure basis, if the enterprise is a new one without any ITR.  
• The cost of certain items in Explanation, I to sub-section (1) of section 7 of the Act is out from the calculation of the amount of investment in plant and Machinery.  

Explanation I to sub-section (1) of section 7 - “For the removal of doubts, it is hereby clarified that in calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other items as may be specified, by notification, shall be excluded”.