With the enactment of MSMED Act 2006 and with the issuance of the Government Of India, Ministry Of Commerce & Industry, Department Of Industry Policy & Promotion Notification No. S.O. 563(E) dated 27.02.2009, the paradigm shift that has taken place in the supportive measure extended by GOI to Small Scale or an Ancillary Industrial Undertaking is the inclusion of the services sector in the definition of Micro Small & Medium Enterprises, apart from extending the scope to medium enterprises.
The MSMED Act 2006 has modified the definition of Micro Small & Medium enterprises engaged in manufacturing or production and providing or rendering of services. This definition has been adopted for the purpose of extending Bank Credit vide RBI circular no. RPCD.PLNFS.BC.No. 63/06.02.31/2006-07 dated 04-04-2007.
As per MSMED Act 2006 the MSME segment has broadly been classified into Manufacturing Enterprises & Service Enterprises.
A Manufacturing Sector Enterprise is one, which is engaged in the manufacturing or production, processing or preservation of goods. Investment in plant & machinery (Original Cost excluding Land & Building and the items specified by the Ministry Of Small Scale Industries vide its notification No. S.O. 1722(E) dated 5.10.2006) is the criterion for classifying a manufacturing enterprise into Micro, Small and Medium Manufacturing Sector Enterprise.
A Service Sector Enterprise is one, which is engaged in providing or rendering of services. Investment in equipments (Original Cost excluding Land & Building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED ACT 2006) is the criterion for classifying a service enterprise into Micro, Small and Medium Service Sector Enterprise.
Manufacturing Sector(Investment in P & M)
Service Sector(Investment in Equipments)
Upto Rs 25.00 Lacs
Upto Rs 10.00 Lacs
More than Rs 25.00 Lacs upto Rs 5.00 Crores.
More than Rs 10.00 Lacs upto Rs 2.00 Crores
More than Rs 5.00 Crores upto Rs 10.00 Crores
More than Rs 2.00 Crores upto Rs 5.00 Crores