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1. What was existing MSME Classification and revised definition of MSMEs?

Existing MSME Classification: In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes: a) Manufacturing Enterprises b) Service Enterprises. The existing MSME Classification was based on the investment in plant and machinery / equipment for manufacturing / service enterprises.

Existing MSME Classification: The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as under:

Criteria: Investment in Plant & Machinery or Equipment

Classification	Micro	Small	Medium
Mfg. Enterprises	Investment < Rs. 25 lakh	Investment < Rs. 5 cr.	Investment < Rs. 10 cr.
Services	Investment < Rs. 10 lakh.	Investment < Rs. 2 cr.	Investment < Rs. 5 cr.

Revised MSME Classification

As per the Government notification dated 1st June 2020 and 26th June 2020, the new revised MSME Classification will be based on the investment in plant and machinery / equipment and Annual Turnover of (Manufacturing and Service enterprises) and the limit for the same is given in the below table.

In continuation to above notification, the notification dated 26th June, 2020 was issued by Ministry of MSME stating that "Exports of goods or services or both, shall be excluded while calculating the turnover of any enterprise whether micro, small or medium, for the purposes of classification".

Revised MSME Classification: Limits for Investment in plant and machinery / equipment for manufacturing / service enterprises, and Annual Turnover as under:

Composite Criteria: Investment and Annual Turnover

Classification	Micro	Small	Medium
Manufacturing & Services	Investment < Rs. 1 cr. and Turnover < Rs.5 cr.	Investment< Rs. 10 cr. and Turnover < Rs.50 cr.	Investment< Rs. 50 cr. and Turnover < Rs.250 cr.