Introduction to MSME Registration
Micro, Small, and Medium Enterprises (MSME) are the entities that deal with the production of goods and services. Indian government initiated the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, which facilitates a range of benefits to the businesses registered under the MSME Act as MSME/SSI.
MSME has a significant contribution to the socio-economic development of the country and is often referred to as the foundation of our economy. The Indian government has continually exhibited its support for small-scale industries and the unorganized business sector.
The ministry of MSME indirectly aids the government in dealing with the crisis of unemployment. There are 6,08,41,245 MSMEs actively running operations across the country, and they generate 45% employment, 50% exports, and 95% industrial units.
A stats of MSME registration at the Udyam portal revealed that the majority of the registration is from service-based enterprises, which are 6, 30,820 (62.9%). On the other hand, 3 71,937 (37.1%) registrations are from businesses in manufacturing industries.
- Banks & Govt offer collateral-free loans
The Government of India launched the Credit Guarantee Fund Scheme (CGS) to give collateral-free loans to the micro and small sector industries.
The Indian government, in association with the Ministry of Micro, Small and Medium Enterprises (MSME), and Small Industries Development Bank of India (SIDBI), started Credit Guarantee Fund Trust (CGTMSE) to allocate credit for small and micro-level enterprises.
The finance minister declared a collateral-free automatic loan of upto 3 lakhs crore for small businesses to recover their debts and losses during covid-19.
- Reservation policies for the manufacturing sector
Development and Regulation Act, 1951 is considered a crucial act in favor of SSI (Small Scale Industries) that provides reservation policies for the exclusive manufacture of items.
- Direct exemptions on Income tax
As mentioned in the government scheme, the businesses registered under MSME get a direct exemption of income tax for the first year of business, depending on its activities. It offers a major relief for enterprises from detailed bookkeeping habits and complex auditing processes.
- A subsidy for Bar Code registration
Businesses registered at MSME get subsidies for bar code registration. Barcodes are given in the form of numbers and parallel lines, which are readable through machines. Barcodes are essential to keep track of goods in the entire process of supply and chain management.
- Support against the delay of payment
The Ministry of Micro, Small, and Medium Enterprises protects the right of interest and A delay in payment of goods from the buyers. An act emphasis on conciliation, arbitration and settlement of disputes within a minimum time limit.
If the enterprise registered under the MSME act is a supplier of goods, buyers are responsible for clearing dues earlier than the date of the agreement. 15 days are allowed for payment in case the date is not mentioned, but it can not exceed 45 days.
- Minimum interest rates of banks
An interest rate is lower for the enterprises under MSME. The targets of banks include a 20% hike in credit to micro and small businesses, 10% annual growth in bank accounts of micro, and small enterprises and 60% growth in lending credits to the small scale industries. Enterprises registered under MSME benefit from quick granting of loans for their initial run in the market.
- 15% subsidy of CLCSS
Credit Linked CGSTI Subsidy Scheme (CLCSS) is a scheme of The Ministry of Micro, Small, and Medium Enterprises (MSME) for technological upgradation of the businesses. The government of India launched the scheme in October-2000, and it offers a 15% subsidy which can not go beyond 15 lakhs. The maximum limit of loans for subsidy’s calculation under the scheme is 100 lakhs.
Following industries can avail benefits of CLCSS:
- Biotech Industry
- Common Effluent Treatment Plant
- Food Processing (Ice-cream included)
- Rubber Processing including vehicle Tyres
- Dyes and Intermediates
- Industry based on Medicinal and Aromatic plants
- Corrugated Boxes
- Plastic Moulded/ Extruded Products and Parts/ Components
- Poultry Hatchery & Cattle Feed Industry
- Concession in payment of electricity bill
Enterprises having a registered certificate of MSME get a concession on electricity bills if they submit an application to the electricity department.
- Reimbursement of ISO certification
MSME registered businesses can get total exemption ISO certificate charges if they send an application with the registration certificate to the respective authority. ISO certification is required for promoting the standards of enterprises registered as MSMEs at the time of bidding to multiply their performance.
- 50% subsidy for registration of patent
Businesses registered with MSME own a 50% subsidy in patent registration after making such an application with an MSME certificate.
To avail, the benefits of MSMED Act, 2006 initiated by Indian government, MSME Registration is required. Get in touch with us for Registration of MSME.
As the glamour of Entrepreneurial culture is booming in India, MSME tends to grow rapidly in the coming years. The government keeps implementing various policies and regulations for the development of micro and small-scale industries by incorporating them with other public or private institutes.
Company Name: MSME / Udyam Registration Consultancy
Contact Person: Vishal Satpute
Email: Send Email
Address:Office No. 101-102, 1st Floor, Gulmohar Apartments, East Street Camp
City: Pune – 411001