Govt says GSTIN not mandatory for MSME registration: Here's all you need to know

The Indian government has made the MSME registration process simpler. Now, entrepreneurs and proprietors — who are exempted from filing GST returns — can register their company on the Udyam Registration portal as an MSME with the help of a PAN card. 

This facilitation would help several micro-enterprises, including skilled craftsmen, artisans, and other enterprises in the informal sector and unorganised sector, to register easily. 

The Ministry of MSME had launched the paperless portal in June 2020 to simplify the registration processes for any enterprise under MSME and provide a single-page registration to save time.

In a notification issued on March 5, the MSME ministry said,

“For any proprietorship enterprise not registered under any Act or rules of the Central Government or the State Government, the proprietor may use his or her PAN for registration of the enterprise on the Udyam Registration portal, and for all other types of enterprises, PAN shall be mandatory now. The proprietor may use his or her PAN for registering the enterprise.”

ALSO READ

These 5 banks offer easy business loans to MSMEs and entrepreneurs

According to media reports, the Udyam Registration portal has registered over 25 lakh MSMEs after releasing the notification. 

Earlier, in a notification dated November 26, 2020, GSTIN (Goods and Service Tax Identification Number) was made one of the mandatory conditions for registration on the MSME portal that was effective from April 1, 2021. 

However, several MSME associations raised concerns that the measure of making GSTIN mandatory is impacting the registration process as many enterprises are exempt from the mandatory requirement of filing GST returns as per the GST Act/notifications.

It also brought forward the condition of annual turnover as several MSME might be less than the threshold limit for exemption from registration under the GST Act.