Ministry of MSME2020-06-26

Revised MSME Classification Criteria — Investment + Turnover Composite Basis

Notification S.O. 2119(E)

Replaced the 2006 MSME investment-only classification. New dual criteria (investment AND turnover). Micro: invest ≤ ₹1 Cr + turnover ≤ ₹5 Cr. Small: invest ≤ ₹10 Cr + turnover ≤ ₹50 Cr. Medium: invest ≤ ₹50 Cr + turnover ≤ ₹250 Cr.

Issued: 2020-06-26
Effective from: 2020-07-01
Act: MSMED Act 2006 s.7

What it says

Micro Enterprise

Investment in plant and machinery/equipment does NOT exceed ₹1 crore AND annual turnover does NOT exceed ₹5 crore. BOTH conditions must be satisfied.

Small Enterprise

Investment does NOT exceed ₹10 crore AND annual turnover does NOT exceed ₹50 crore.

Medium Enterprise

Investment does NOT exceed ₹50 crore AND annual turnover does NOT exceed ₹250 crore.

Composite criterion

If either investment or turnover exceeds the limit for a category, the enterprise is classified into the next higher category. An enterprise satisfying both criteria for a lower category stays in that category.

Self-declaration via Udyam

Classification is based on self-declaration on the Udyam Registration Portal (udyamregistration.gov.in). PAN and Aadhaar are linked for auto-verification of turnover from GST and ITR data.

Supersession chain

Supersedes: MSME classification under MSMED Act 2006 original s.7

Affected forms and returns

Udyam Registration Certificate
DPT-3 MSME reporting
MSME-1 half-yearly return
s.43B(h) applicability

⚠ VERIFY

Whether the ₹250 Cr turnover ceiling for Medium enterprises (inserted by Finance Minister's announcement 2020) was formally notified under MSMED Act s.7 or only as an administrative policy — S.O. 2119(E) is the operative notification. Confirm current thresholds on udyamregistration.gov.in.

Primary source

Notification S.O. 2119(E) — issued by Ministry of MSME under MSMED Act 2006 s.7

View official notification ↗

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