The government has notified revised criteria for the classification of micro, small and medium enterprises (MSME) with effect from 01.07.2020.

MSME eligibility criteria based on the plant, equipment, and annual turnover

Investment in Plant and Machinery/Equipment< 1 Crore< 10 Crore< 50 Crore
Annual Turnover< 5 Crore< 50 Crore< 250 Crore


The Ministry has stated that perhaps the purchase value of the plant & machinery but not the book value (purchase value less depreciation) for investment in the plants & machinery for the purpose of classifying a company as Micro, Small and Medium shall be considered

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Following to be excluded while calculating the investment in Plant & Machinery for the purpose of classification of the entity in Micro, Small and Medium enterprises

  • Equipment such as tools, jigs, dyes, moulds and spare parts for maintenance and the cost of consumables
  • Installation cost/charges of Plant and Machinery
  • Research, Development and pollution control equipment
  • Bank charges and service charges paid to National Small Industries Corporation or State Small Industries Corporation
  • Procurement or installation of cables, wiring, bus bars, electrical control panels, oil circuit breakers, miniature circuit breakers which are necessary to be used for providing electrical power to plant and machinery or for safety measures
  • Gas Producer Plants
  • Transportation Charges for indigenous machinery from place of their manufacture to the site of the enterprise
  • Charges paid for Technical know-how for the erection of Plant and Machinery
  • Storage Tanks which store raw material finished goods, and are not linked with the manufacturing process and
  • Firefighting equipment;