Jun 30, 2020

GJEPC: Revised Definition of MSME Will Benefit Large Number of Exporters from G&J Sector

The Gem & Jewellery Export Promotion Council (GJEPC) has welcomed the revised definition for Micro, Small and Medium Enterprises (MSME) announced by the Government of India recently under which exports will be excluded from the calculation of turnover for the purposes of classification of a company.

“We are glad that through the new MSME definition and exclusion of export turnover cap of Rs. 250 crore a large number of exporters of our sector will be benefited. This would also help to revive the exports in this difficult time. We thank the Govt and the pragmatic leadership for this great step forward,” GJEPC Chairman Colin Shah said.

It may be recalled that the government had in a notification on June 1 revised some of the criteria for the classification of MSMEs. Under it, the distinction between Manufacturing and Service enterprises that existed earlier was removed. Further, the value of investment in plant /machinery was substantially increased for purposes of calculation, but a maximum turnover criterion was included. This was not helpful to the G&J sector, where more than 85% of exporters are actually MSMEs, as the high value of the raw materials used in manufacturing pushed up the turnover even for smaller units.

GJEPC immediately represented the matter to the government and requested Hon’ble MSME Minister Shri Nitin Gadkari to exclude exports for purposes of calculating MSME turnover.

The Council’s efforts resulted in a revised notification issued on June 26 stating that “exports of goods or services or both, shall be excluded while calculating the turnover of any enterprise whether micro, small or medium, for the purposes of classification”.

Elaborating on the benefits of the government’s decision, GJEPC Chairman Shah stated, “The initiative of the government to increase the bandwidth of MSME by increasing the investment criteria and excluding exports for calculation of turnover criteria will make the MSME more updated in machinery and technology and it would enable them to grow the export business and bring valuable foreign exchange into the country.”

Shah also said that making other MSME benefits like interest subvention and other related measures announced by the government available to the G&J sector will make them more competitive in the international arena.

GJEPC also informed its members that revised guidelines for “Udyam Registration” have also been notified. “Members are requested to note that with effect from the 1st day of July, 2020, in addition to new MSME’s also all existing MSME members will have to re-register themselves on Udyam Registration”, the Council stated.