At present MSMEs engaged in manufacturing and services (having Udyam registration) are eligible for various benefits*. Classification of an enterprise into Micro or small or medium category is determined based on level of a) investment in plant and machinery or equipment (other than land and building, furniture and fittings) & b) domestic turnover (i.e. excluding exports) **. For eg. Status for FY 2022-23 is determined based on Investment WDV and Turnover details as sourced from ITR/GSTR relevant for FY 2020-21.
In case of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent re-classification, henceforth an enterprise shall continue to avail of all non-tax benefits of the category (micro or small or medium) it was in before the re-classification, for a period of three years (instead of one year) from the date of such upward change.
Btw, as of Sep 2021, there are nearly 50.8 Lakh MSMEs got registered on Udyam Registration portal, comprising of Micro (93.98%), Small (5.39%) and Medium (0.65%).
* Various benefits for MSMEs include eligibility for priority sector lending from banks, Credit guarantee on loans upto Rs.2cr, Invoice discounting via TReDS facility, higher interest rate (3X RBI bank rate) on trade receivables outstanding for more than 45 days, priority in public procurement, concessional fee for registration of IPRs etc. Refer here for more
** (i) Micro enterprise: Investment<=₹1 crore & Turnover<= ₹5 crore
(ii) Small enterprise: Investment <= ₹10 crore & Turnover <=₹50 crore
(iii) Medium enterprise: Investment <= ₹50 crore & Turnover <= ₹250 crore
All units with GSTIN listed against the same PAN shall be collectively treated as one enterprise and the turnover and investment figures for all of such entities shall be seen together and only the aggregate values will be considered for deciding enterprise category.