Govt registers 1 crore GST-exempted informal micro enterprises for access to priority sector loans
November 22, 2023
The MSME Ministry in collaboration with SIDBI had launched UAP under the MSME formalization project in January this year to bring IMEs under the formal ambit for availing benefits of priority sector lending.
The number of informal micro units (IMEs), which are not covered under the Goods and Services Tax (GST) regime or exempted from the CGST Act, 2017, registering for the Udyam certificate via the government’s Udyam Assist Platform (UAP) to be eligible for priority sector loans (PSL) has crossed the 1-crore mark. At the time of filing this report, 1.01 crore IMEs were Udyam-registered, according to the data from the Udyam portal.
The MSME Ministry in collaboration with SIDBI had launched UAP under the MSME formalization project in January this year to bring IMEs under the formal ambit for availing PSL benefits. The platform was launched with the inclusion of 8 lakh IMEs which were among the beneficiaries of the government’s scheme for street vendors PM SVANidhi scheme, FE Aspire had reported earlier.
UAP was originally discussed in a report by the standing committee on finance headed by Jayant Sinha, Member of Parliament and former Minister of State for Finance in April last year. The report had noted that apart from making the registered entities eligible for benefits under government schemes, they can also be seamlessly connected to the fast-emerging digital ecosystem including platforms like GeM, TReDS, Invoicemart, other digital marketplaces, etc.
Importantly, the Reserve Bank of India (RBI) in May this year informed all financial institutions including banks and NBFCs to treat IMEs not covered under GST but having the Udyam certificate as micro enterprises for classification under PSL norms.
The government had also earlier clarified to RBI that IMEs are those enterprises which are unable to get registered on the Udyam portal due to a lack of mandatory required documents such as Permanent Account Number (PAN) or Goods and Services Tax Identification Number (GSTIN).
To register IMEs, UAP requires banks and other financial institutions — known as Designated Agencies (DAs) under this formalisation project — to share data of their IME customers for registration. The platform then validates the data, registers IMEs on the Udyam registration portal, and generates the registration number along with the Udyam Assist Certificate.
[The Financial Express]
