Under the composite criteria for MSME classification,

Solution

The MSME classification system applies a composite criterion based on both investment and turnover. • If an enterprise crosses the ceiling limit in either of the two criteria (investment or turnover), it will be moved to the next higher category. • However, no enterprise is downgraded unless it goes below the ceiling limits for both investment and turnover simultaneously. This prevents frequent category changes and ensures stability in classification. Additionally, all units with the same PAN and GSTIN are treated collectively, and their combined turnover and investment are considered to decide whether the enterprise qualifies as micro, small, or medium.