In this informative blog post, we have penned all the deets you need to know regarding the Udyog Aadhar validity. Continue reading to learn more.
The Ministry of MSME (Micro, Small and Medium Enterprises) has granted another three-month extension to MSMEs registered under the UAM (Udyog Aadhar Memorandum) system in order to shift to the latest Udyam Registration system, which was introduced on 1 July 2020. The ministry declared in a statement that the validity of the Udyog Aadhar Memorandum will be extended until 31 March 2022, from 31 December 2021. According to reports, in January 2022, it was stated that UAM registrations would be valid for a while for MSMEs to transfer to the Udyam platform.
Previously, MSMEs that earned UAM registrations or Entrepreneur Memorandum – II before 30 June 2020 had their registrations valid until 31 March 2021. The government extended the validity period for MSMEs to continue receiving benefits under several existing incentives and schemes involving priority sector loans until the end of 2021. On 27 January 2022, the MSME Ministry’s official website released a notice dated 19 January 2022, extending UAM registration until the end of March.
Following the government’s updated definition of MSME, UAM and EM-II were superseded by Udyam Registration in July 2020. The RBI (Reserve Bank of India) reaffirmed in 2020 that current UAMs or EMs II received by MSMEs before 30 June 2020 will be valid until 31 March 2021, despite the fact that MSMEs were required to register on the Udyam Registration platform before March 2021.
Important Announcement for Udyog Aadhar Memorandum (UAM) Holders
As previously stated, current registrations as UAMs and EMs II will no longer be valid after 31 March 2022, and it’s strongly advised that the business owner file a new registration on the latest Udyam Registration platform.
As per the Ministry’s official notice, all firms registered until 31 March 2020 would be re-categorised under this notification. In order to make the re-categorisation realistic and apt, it’s essential to punch in the most recent details.
A Brief Note on Udyog Aadhar Memorandum and Udyam Registration
- Udyog Aadhar Memorandum or UAM is a one-page registration that’s similar to the former 11 forms procedure for MSMEs self-certification. Udyog Aadhar Memorandum is basically a self-declaration format in which the MSME self-certifies its existence, owner or promoter’s Aadhar details, bank account details, and other minimal details.
- Any business owner who wishes to start an MSME must first register with the Udyam Registration platform. Once registered, a business (Udyam) is assigned with an Udyam Registration Certificate and Udyam Registration Number. This UAN is basically an identification that may be utilised in every MSME scheme application.
A Brief about the Government Reports
As per the MSME Ministry’s yearly report 2020-2021, 21,96,902 EM Part II files were registered between 2007 and 2015, whereas from September 2015 to 30 June 2020, the Indian government witnessed 1,02,32,451 UAM registrations. According to MSME Dashboard statistics, as of 7 February 2022, more than 70 lakh new and existing MSMEs had registered on the latest Udyam site in roughly 19 months, compared to 1 crore MSMEs on Udyog Aadhar Memorandum registration, which took more than five years.
The coronavirus pandemic has highlighted the importance of transitioning to an advanced digital platform. This transition has not been simple, and much adjustment was required. For a few MSMEs, it’s their only means of survival. According to the MSME Secretary, the portal has received a positive response.
Nevertheless, it was unknown how many of such MSMEs shifted from EM-II or UAM registrations and how many were new enterprise registrations. Among the already existing benefits put forward to MSMEs for the Udyam Registration were the elimination of registration renewal fees, the ability to add multiple activities such as service or manufacturing to a single registration, and the ability for MSMEs to register themselves on the GeM (Government e-Marketplace) while also onboarding the TReDS platform, Public Procurement Policy, Credit Guarantee Scheme, etc.
Why Such a Shift to Udyam Registration?
The amendment was made in light of the difficulties experienced by MSMEs during the COVID-19 scenario, as well as representations received from numerous MSME associations, government departments, and financial institutions concerned with the MSME sector.
Existing UAM and EM – II holders are expected to be able to shift to the latest system (Udyam Registration), which was introduced on 1 July 2020 and benefit from Government Scheme, paving the way for bolstering MSMEs and leading to increased economic activity, faster recovery, and job creation.
Interested businesses can register for free and without submitting any papers at https://udyamregistration.gov.in.
Benefits of Udyam Registration
Several benefits are associated with MSMEs when shifting to the Udyam Registration. Some of them are as follows:
- Collateral-Free Bank Loans: The Government of India introduced the CGS (Credit Guarantee Fund Scheme) for MSMEs to provide collateral-free loans to small and micro-enterprises. Benefits are available to both established and new businesses under this plan.
- Easy Clearance of Outstanding Payments: A buyer is obligated to pay for the services or products within 15 days after purchase under the MSMR registration incentives. If the purchaser delays payment for over 45 days, the firm may impose compound interest at three times the rate announced by the Reserve Bank of India. Purchasers of goods or services from SSIs or MSMEs might often be slow to pay. Such disagreements must be resolved as quickly as possible through arbitration and conciliation.
- Overdraft Facility along with Interest Exemption: Enterprises or businesses registered as SSI/MSME under the MSME Act are entitled to a 1% overdraft benefit under the Credit Guarantee Trust Fund Scheme. However, this varies from bank to bank.
- A Reduction of 50% on Patent and Trademark Fees: Firms registered under the MSME Act are eligible for a 50% rebate on patent registration. It can be obtained by submitting an application to the relevant ministry. Furthermore, one of the significant MSME registration perks is the government-suggested subsidy for industrial development.
Conclusion
The Indian Government is making every effort to create India “Atmanirbhar”: https://aatmanirbharbharat.mygov.in/ (self-dependent) by offering this MSME – UDYAM portal, not only by reinventing MSME criteria but also by launching different initiatives and services that would provide small and medium-sized business owners with a boost. The government’s objective for “Atmanirbhar Bharat” is to not only meet the needs of our own nation by providing locally produced services and products but also to raise demand for services and goods by enhancing the quality of our products and services in the global marketplace.
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