MSMEs are entitled to continue receiving all non-tax benefits associated with the category from which they were previously demoted.
MSME companies are allowed to continue to take advantage of all of the non-tax benefits of the category they were in prior to the re-classification for a period of three years starting from the date of such an upward adjustment.
The Ministry of Micro, Small, and Medium Enterprises issued a notification in the form of S.O. 4926 (E) on October 18, 2022, stating that in the event of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent re-classification, an enterprise shall continue to avail of all non-tax benefits of the category it was in before the re-classification, for a period of three years from the date of such an upward change. This notification was issued
This decision was made after appropriate consideration with MSME stakeholders, and it is in keeping with the Aatma Nirbhar Bharat Abhiyan (Project to Make India More Spiritually and Morally Appropriate). In the event that those registered micro, small, and medium enterprises (MSMEs) experience an upward graduation in their category and a subsequent reclassification, the Ministry of Micro, Small, and Medium Enterprises of the Government of India has granted permission for them to continue to receive non-tax benefits for three years instead of just one. Benefits that are not related to taxes include those provided by a variety of programmes run by the government, such as the Public Procurement Policy and Delayed Payments, amongst others.
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