TaxTMI 
TaxTMI 
PLS GUIDE WHETHER NOW LIMIT FOR MSME IS BY INVESTMENT OR TURNOVER
MSME LIMIT BY TURNOVER OR INVESTMENT
14 Jun 2018 
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MSME classification by annual turnover replaces investment criterion, shifting eligibility to verifiable turnover-based rules.
The amendment replaces the investment-based classification of micro, small and medium enterprises with an annual turnover-based classification under Section 7 of the MSMED Act, and empowers the Central Government to vary turnover limits by notification; the change aims to make classification objective, verifiable using tax data, reduce transaction costs and inspections, and promote ease of doing business, while noting some administrative implementation gaps at the state level. (AI Summary)
The amendment replaces the investment-based classification of micro, small and medium enterprises with an annual turnover-based classification under Section 7 of the MSMED Act, and empowers the Central Government to vary turnover limits by notification; the change aims to make classification objective, verifiable using tax data, reduce transaction costs and inspections, and promote ease of doing business, while noting some administrative implementation gaps at the state level. (AI Summary)