GSTIN Not Mandatory for MSME Udyam Registration
Ministry of MSME has, vide its notification dated 05.03.2021, relaxed the condition of having GSTIN as mandatory for registration as MSME and has provided that the exemption from the requirement of having GSTIN shall be as per the provisions of the Central Goods and Services Tax Act, 2017. It further provided that in case of any proprietorship enterprise not registered under any Act or rules of the Central Government or the State Government, the proprietor may use his or her PAN for registration of the enterprise in the Udyam Registration portal and for all other types of enterprises PAN shall be mandatory
Earlier, Government of India vide its notification dated November 26, 2020 had made GSTIN (Goods and Service Tax Identification Number) one of the mandatory conditions for registration on the MSME portal which was to take effect from April 1, 2021.
However, several MSME associations raised concerns that the measure of making GSTIN mandatory is impacting the registration process as many enterprises are exempt from the mandatory requirement of filing GST returns as per the GST Act/notifications. It also brought forward the condition of annual turnover as several MSME might be less than the threshold limit for exemption from registration under the GST Act.
This is a welcome step by the Govenment in the best interest of MSME.