XYZ Pvt. Ltd., is engaged in manufacture of engineering components. The Company has investment of ₹5 Crore and Turnover of ₹25 Crore. The Company wants to know their category as per new definition of MSME. Will your answ

CS Executive · Setting up of Business Entities and Closure · PYQS · June 2021
XYZ Pvt. Ltd., is engaged in manufacture of engineering components. The Company has investment of ₹5 Crore and Turnover of ₹25 Crore. The Company wants to know their category as per new definition of MSME. Will your answer differ, if XYZ Pvt. Ltd. is in service sector with the aforesaid limits of investment and turnover?

Answer & Explanation:

Under the new definition, there will be no more distinction between Manufacturing and Service MSMEs. Micro Enterprise: Investment in Plant and Machinery or Equipment: Not more than ₹1 crore and Annual Turnover; not more than ₹5 crore. Small Enterprise: Investment in Plant and Machinery or Equipment: Not more than ₹10 crore and Annual Turnover; not more than ₹50 crore. Medium Enterprise: Investment in Plant and Machinery or Equipment: Not more than ₹50 crore and Annual Turnover; not more than ₹250 crore. XYZ Pvt. Ltd. Can be categorised as a Small Enterprise as its investment is up to ₹10 crore and turnover is less than ₹50 crore. Even if it is a service provider the Category will not change.

Topics: MSME

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