Launch of Udyam Assist Platform for validation of Informal Micro Enterprises  

Informal Micro Enterprises (IMEs) were defined as those enterprises which are unable to get registered on the Udyam Registration Portal (URP) due to a lack of mandatory required documents such as Permanent Account Number (PAN) or Goods and Services Tax Identification Number (GSTIN).

As per the existing guidelines, all lenders were required to obtain a ‘Udyam Registration Certificate’ for the classification of entities as MSMEs. In view of the above mandatory condition of registration, such IME enterprises are unable to avail the benefits of Government schemes or programmes.

The government of India has now clarified to RBI that the turnover of enterprises exempted from filing returns under the provisions of the Central Goods and Services Tax Act, 2017 shall be the sole criterion to be defined as IMEs for the purpose of UAP.  Thus, IMEs are those enterprises that are not covered in the Goods and Services Tax regime.

The Ministry of Micro, Small, and Medium Enterprises (‘MSME’), has now launched the Udyam Assist Platform (UAP), to facilitate formalisation of Informal Micro Enterprises (IMEs), through the online generation of the Udyam Assist Certificate. The registration on the platform is done with the assistance of Designated Agencies which are RBI-regulated entities (including scheduled commercial banks, non-banking financial companies, etc.).

Accordingly, the Informal Micro Enterprises (IMEs) with an Udyam Assist Certificate shall be treated as Micro Enterprises under MSME for the purposes of Priority Sector Lending (PSL) classification.

RBI in its circular dated May 9, 2023, advised that an interface has been created between the UAP and Udyam Registration Portal (URP) to enable the transition and migration of the IMEs from UAP to URP, once IMEs obtain the mandatorily required documents.