The Ministry of MSME, Government of India, now permits registered MSMEs to take advantage of non-tax benefits for an extended period of three years, as opposed to the previous one year, in cases where there is an upward change in their category and resulting reclassification.
In the event of an upward change in terms of investment in plant and machinery or equipment, turnover, or both, and subsequent reclassification, an enterprise shall continue to enjoy all non-tax benefits of the category it was in prior to the reclassification for a period of three years from the date of such upward change, according to a statement from the Ministry of MSME, Government of India.
The government has decided to grant non-tax benefits to such MSMEs in accordance with the Aatma Nirbhar Bharat Abhiyan after due deliberation with stakeholders.
Government schemes like Public Procurement Policy, Delayed Payments, and others are examples of non-tax benefits.
Ministry of MSME, GOI Notification dt. 18/10/2022: MSMEs get Extended Period of 3 Years for Non-tax Benefits
S.O. 4926(E).- ln exercise of the powers conferred by sub-section (1) read with sub-section (9) of section 7 and sub-section (2) read with sub-section (3) of section 8 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), the Central Government hereby makes the following further amendments in the notification of the Government of India, Ministry of Micro, Small and Medium Enterprises number S.O. 2119(E), dated 26/06/2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), namely:-
In the said notification, for sub-paragraph (5) of paragraph 8, the following sub-paragraph shall be substituted, namely:-
“(5) In case of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent re-classification, an enterprise shall continue to avail of all nontax benefits of the category (micro or small or medium) it was in before the re-classification, for a period of three years from the date of such upward change.”