(1) For the purpose of this Act, industries are classified as follows:-
(a) Micro-scale Enterprises: Apart from the industries which require permission as per section 8, the industries having the following conditions shall be considered as micro-enterprises:-
(1) Having a fixed capital of up to twenty lakh rupees, excluding real estate,
(2) Highness himself is involved in the operation and management of the industry,
(3) Having a maximum of nine workers including the entrepreneur,
(4) The annual turnover is less than one crore rupees,
(5) If an engine, equipment or machine is used, the electric current, fuel or other oil consumed by the engine, equipment or machine has a capacity of twenty kilowatts or less.
(b) Cottage Industries: Industries having the following conditions shall be treated as cottage industries:-
(1) Based on traditional skills and techniques,
(2) Labor intensive and based on special skills or local raw materials and local technology, art and culture,
(3) If an engine, equipment or machine is used, electrical energy of a maximum capacity of fifty kilowatts is used,
(4) Industries mentioned in schedule-2.
(c) Small scale industries: Industries having fixed capital up to fifteen crores of rupees, excluding small scale enterprises and cottage industries,
(d) Medium Industries: Industries having a fixed capital of more than fifteen crore rupees to fifty crore rupees,
(e) Large Industries: Enterprises having fixed capital exceeding fifty crore rupees.
(2) The industries mentioned in sub-section (1) are classified as follows on the basis of the nature of goods or services produced by such industries:-
(a) Energy-generating industries: The industries mentioned in schedule-3 engaged in the business of generating energy,
(b) Manufacturing industries: Industries that produce goods by using or processing raw materials, auxiliary raw materials or semi-processed raw materials,
(c) Industries based on agriculture and forest produce: Industries mentioned in Schedule-4 that produce any goods from raw materials based on agriculture or forest produce or related to agriculture or forest produce,
(d) Mineral Industry: Mining orIndustries that process and produce any metal or non-metallic mineral,
(e) Infrastructure Industry: The industries mentioned in Schedule-5 which construct and operate physical infrastructure (f) Tourism Industry: Industries mentioned in Schedule-6 related to tourism services,
(G) Industries based on information technology, communication technology and information transmission technology: Industries mentioned in Schedule-7 that provide information, communication or information transmission technology services using technology for information collection, processing and transmission,
(h) Service industries: Industries mentioned in Schedule-8 that produce or provide services.
(3) In case of capital increase, capacity increase, purpose addition, change or modification of any industry according to section 12, such industry shall be automatically classified in the same category according to sub-section (1).
(4) Notwithstanding anything contained elsewhere in this section, the Government of Nepal shall notify in the Nepal Gazette on the recommendation of the Board. An industry may be included in the classification of industries by publication or arrange for the industry included in one category to be in another appropriate category.
(5) If the prescribed cooperative organizations registered under the prevailing law wish to register the industry in such a way that the ownership of the organization is registered, the industry can be registered in accordance with this Act.
(6) If the industries registered before the commencement of this Act wish to be classified in accordance with this Act, the industry registration body may update the classification after completing the prescribed process.
(7) The Government of Nepal shall publish a notice in the Nepal Gazette under sub-section (1) or
(2) may make necessary changes in the classification.