The Ministry of MSME has created a National Industrial Classification to identify all economic activity in businesses across the country so that micro, small and medium enterprises can be supported. The National Industrial Classification was initially founded in 1960, with different versions used until 2008 when the latest version was implemented.
As per the latest National Industrial Classification 2008, the following business activities are not allowed to obtain registration as MSMEs in India:
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1 Activities of Household or Domestic nature
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2 Agriculture and allied activities
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3 Mining and quarrying
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4 Manufacturing of cigarettes, tobacco products, and alcohol
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5 Manufacturing of arms and ammunition
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6 Manufacturing of nuclear fuel
What is MSME?
Micro, Small and Medium Enterprises (MSMEs) are defined by the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.
MSMEs are categorized according to their investment in plant and machinery or equipment. Manufacturing MSMEs are those which are engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule of the Industries (Development and Regulation) Act, 1951. Service enterprises are those which provide services and are not defined according to their investment in plant and machinery or equipment.
In order to be registered as an MSME in India, businesses must meet certain criteria with regards to their investment in plant and machinery or equipment. Businesses that do not meet these criteria are not allowed to obtain registration as MSMEs in India. The following is a list of business activities that are not allowed to obtain registration as MSMEs in India:
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1 Businesses engaged in the production of arms and ammunition
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2 Businesses engaged in the production of nuclear weapons or other explosive devices
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3 Businesses engaged in the production of hazardous chemicals
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4 Businesses engaged in the production of tobacco products
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5 Businesses engaged in the gambling
The process of registration of MSME
The process of registration of MSMEs in India is very simple and can be done online on the Udyam Registration portal. The first step is to fill out an application form which is available on the website of the Ministry of Micro, Small and Medium Enterprises (MSME). After the payment is made, the applicant will receive a confirmation email from the ministry and will be required to login to the portal using their username and password. Once logged in, they will be able to download their registration certificate.
Eligibility criteria for MSME registration
The Micro, Small and Medium Enterprises (MSME) sector is the backbone of the Indian economy, contributing significantly to its GDP. The MSME sector comprises of units that invest less in terms of machinery and equipment and employ less labour than large industries. In order to promote the growth of this sector, the Government of India has introduced several schemes and initiatives. One such initiative is the MSME registration, which provides for certain benefits to enterprises that are registered as MSMEs.
However, not all business activities are allowed to obtain registration as MSMEs in India. The Ministry of Micro, Small and Medium Enterprises has released a list of business activities that are not eligible for MSME registration. These activities include:
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Manufacturing or production of arms and ammunition
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Manufacturing or production of explosives
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Manufacture of drugs and pharmaceuticals
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Production of tobacco and tobacco products
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Mining and quarrying
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Construction
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Real estate development
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Hospitality
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Transportation
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Logistics
How to apply for MSME/Udyam registration?
If you want to apply for MSME registration, there are a few things you need to know. First, you need to have a registered business. This can be in the form of a sole proprietorship, partnership, or limited liability company. Once you have your business registered, you will need to obtain a DSC and DIN from the Ministry of Corporate Affairs. You will also need to provide proof of your business address and contact information. After you have all of this documentation, you can apply for MSME registration online through the MSME website.
FAQs
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1 What business activities are not allowed to obtain registration as MSMEs in India?
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2 Why is it important for businesses to obtain registration as MSMEs in India?
Businesses that are not allowed to obtain registration as MSMEs in India include: companies that engage in the production of alcohol, cigarettes, and tobacco; companies that deal in arms and ammunition; companies that are involved in the betting, gambling, and lottery business; and companies that are involved in the production and sale of pornographic materials.
It is important for businesses to obtain registration as MSMEs in India because this allows them to enjoy certain benefits and privileges, such as access to government schemes and programmes, easier access to credit, and preferential treatment in government procurement.