Govt approves amendment to MSME Development Act | Current Affairs, Current Affairs 2018

Govt approves amendment to MSME Development Act

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Aiming to encourage business in MSME sector, the Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved change in the basis of classifying Micro, Small and Medium enterprises from ‘investment in plant & machinery/equipment’ to ‘annual turnover’.

Besides, ease the art of conducting the business, make the norms of classification growth oriented and align them to the new tax regime revolving around GST (Goods & Services Tax). Section 7 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 will accordingly be amended to define units producing goods and rendering services in terms of annual turnover as a micro enterprise will be defined as a unit where the annual turnover does not exceed Rs five crore; a small enterprise will be defined as a unit where the annual turnover is more than Rs five crore but does not exceed Rs 75 crore and a medium enterprise will be defined as a unit where the annual turnover is more than Rs 75 crore but does not exceed Rs 250 crore.

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