11Jul
Limited purpose addition of Retail and Wholesale Trade in MSME

When the Minister of MSME Shri Nitin Gadkari announced on 2nd July, 2021 that the Government has decided to include Retail and wholesale trades as MSMEs and they are allowed to be registered on Udyam Registration Portal, the entire media got flooded with such newsreports; little knowing the fact that there is a rider with it too.

If we see the fine print of MSME Office Memorandum dated July 2, 2021 as well as RBI circular dated July 7, 2021, it clearly states that the benefits to Retail and Wholesale trade MSMEs are to be restricted to Priority Sector Lending only. So, it is a limited purpose inclusion in the category of MSME to take advantage of priority sector lending only and not otherwise to have other benefits/privileges available to MSMEs.

Retail and Wholesale trade would be allowed to be registered on Udyam Registration Portal for the
following NIC Codes and activities mentioned against them:

  1. Wholesale and retail trade and repair of motor vehicles and motorcycles
  2. Wholesale trade except of motor vehicles and motorcycles
  3. Retail trade except of motor vehicles and motorcycles

The Enterprises having Udyog Aadhaar Memorandum (UAM) under above three NIC Codes are now allowed to migrate to Udyam Registration Portal or file Udyam Registration
afresh.

References:

  1. Ministry of Micro, Small and Medium Enterprises – Office Memorandum (OM) No. 5/2(2)/2021-E/P & G/Policy dated July 2, 2021.
  2. RBI letter no.FIDD.MSME & NFS.BC.No.13/06.02.31/2021-22 dated July 7, 2021.