What is the allowable investment limit in plant & machinery or equivalent for a medium enterprise as per guidelines on MSME?
A10 crore
B25 crore
C50 crore
DNo such limit
Answer:
C. 50 crore
Read Explanation:
- Definition Update: The Ministry of Micro, Small and Medium Enterprises (MSME) revised the classification criteria for MSMEs on 1 July 2020 under the Atmanirbhar Bharat package.
- Revised Criteria: The definition is now based on a composite criterion of both Investment in Plant and Machinery or Equipment and Annual Turnover.
- Medium Enterprise Thresholds:
- Investment in Plant and Machinery or Equipment: Should not exceed Rs 50 crore.
- Annual Turnover: Should not exceed Rs 250 crore.
- Previous Criteria vs. Current: Earlier, the definition was based solely on investment in plant and machinery. The inclusion of turnover criteria is intended to bring more transparency and ease of doing business.
- Exclusions: According to the MSME Act, 2006, the investment in plant and machinery refers to the original cost excluding land and building, and the items as specified by the Ministry of Income Tax Rules.
- Comparative Classification:
- Micro Enterprise: Investment not exceeding Rs 1 crore and Turnover not exceeding Rs 5 crore.
- Small Enterprise: Investment not exceeding Rs 10 crore and Turnover not exceeding Rs 50 crore.