In order to qualify for government incentives and be included under the PSL categorization, the Reserve Bank of India (RBI) has published a circular that clarifies the concept of Informal Micro Enterprises (IMEs).
The IMEs possessing an Udyam Assist Certificate shall be classified as Micro Enterprises under MSME for the purposes of PSL categorization, according to the RBI, citing the notifications and the circulars.
The Indian government has made it clear that IMEs are businesses that can't register on the Udyam Registration Portal (URP) because they don't have the necessary paperwork, including a PAN or a GSTIN (Goods and Services Tax Identification Number).
According to RBI, it has been made clear that the only criterion for defining IMEs for the purposes of UAP shall be the turnover of firms exempt from filing reports under the terms of the Central Goods and Services Tax Act, 2017. Thus, IMEs are businesses that are exempt from the Goods and Services Tax structure.
The Ministry of Micro, Small, and Medium Enterprises (or "MSME") launched the Udyam Assist Platform (UAP) to make it easier to formalize IMEs through the online generation of Udyam Assist Certificates and with the help of Designated Agencies, which are entities under RBI regulation (such as scheduled commercial banks, non-banking financial businesses, etc.), users can register on the site.
It should be emphasized that once IMEs have the legally requisite documentation, a transitional interface has been established between the UAP and Udyam Registration Portal (URP) to enable IMEs to move from the former to the latter.
When IMEs get the legally requisite documentation, they can transition and migrate from the UAP to the Udyam Registration Portal (URP) via an interface that has been built between the two systems.
IMEs with an Udyam Assist Certificate will be considered as Micro Enterprises under MSME for the purposes of PSL categorization in light of the Notification (RBI/2023-24/27
FIDD.MSME and NFS.BC.No.09/06.02.31/2023-24) and clarification.
