MSME Registration is required to access benefits from the federal and state governments, as well as the banking sector, under the MSMED Act. Micro, small, and medium enterprises (MSME) refers to any business that falls into one of these three categories. Over the last five decades, the Micro, Small, and Medium Enterprises (MSME) sector has grown as a highly vibrant and dynamic segment of the Indian economy.
On the 13th of May, 2021, the Indian government announced some significant relief for MSMEs. One of the biggest reliefs is that the government has revised the MSMe definition as a whole.
The distinction between manufacturing and service firms has been erased, investments have been revised upwards, and a new turnover criterion has been imposed under the new definitions.
What is the new and improved MSME definition?
The revised MSME definition is as follows:
Micro Business: Micro enterprises are manufacturing and service businesses with a capital investment of less than Rs 1 crore and a turnover of less than Rs 5 crore.
Small Business: The investment and turnover thresholds for small businesses have been increased to Rs 10 crore and Rs 50 crore, respectively.
Medium-Sized Business: Medium-sized firms have a turnover of up to Rs 100 crore and an investment of up to Rs 20 crore.
Medium-sized businesses are those with an investment of up to Rs 20 crore and a revenue of up to Rs 100 crore.
This revised definition of MSME is a positive step forward for the government of India’s Atma Nirbhar Bharat Abhiyan.
MSME Registration is available to Micro, Small, and Medium-Sized Enterprises in the manufacturing and service sectors. The terms MSME and SSI (Small Scale Industries) are interchangeable.
Though MSME registration is not required, it is useful to businesses since it gives a variety of benefits such as capital investment subsidies, cheaper lending rates, tax breaks, electricity tariff breaks, and other assistance. You can also use our express service to get your SSI or MSME registration in as little as one working day.
Benefits from SSI or MSME Registration
The Indian government has granted numerous benefits to small-scale units, medium-sized businesses, and micro-businesses (MSME). Any company must first register as an MSME/SSI under the MSMED Act in order to be eligible for these benefits. To take advantage of the benefits listed below, a proprietorship firm, partnership firm, private limited company, or limited liability partnership (LLP) must register under the MSMED Act.
The advantages of SSI / MSME registration in India are listed below.
- Banks offer no-collateral loans:
The Government of India (GOI) established the Loans Guarantee Fund Scheme for Micro and Small Enterprises (CGS) to provide collateral-free credit to the micro and small business sector. Existing and new businesses are both eligible to participate in the programme. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was established by the Ministry of Micro, Small and Medium Enterprises of the Government of India and the Small Industries Development Bank of India (SIDBI) to implement the Credit Guarantee Fund Scheme for Micro and Small Enterprises.
- Patent registration is eligible for a generous 50% subsidy:
By submitting an application to the appropriate ministry, businesses with an MSME Registration Certificate can receive a 50% discount for patent registration.
- Overdrafts are subject to a 1% interest rate exemption:
MSME-registered businesses can take advantage of a 1% interest rate reduction on overdrafts, as specified in the plan (this is bank-dependent).
- Eligible for an industrial promotion subsidy:
MSME-registered businesses are eligible for Industrial Promotion Subsidies, as determined by the government.
- Defend yourself from late payments:
The Ministry of Micro, Small and Medium Enterprises protects MSME-registered businesses from late payments from buyers, as well as the right to interest on late payments, through mediation and arbitration, with dispute resolution taking place in the shortest period possible. If a buyer purchases goods or services from a micro or small business with MSME registration, the buyer must pay on or before the date agreed upon between the buyer and the micro or small business. If the agreement does not specify a payment deadline, the buyer must pay within fifteen days of receiving the goods or services. In no case can a payment owed to a micro or small business be delayed for longer than 45 days from the date of acceptance or anticipated acceptance. If the buyer fails to pay on time, the buyer must pay compound interest with monthly interest rests to the supplier on the amount due from the stipulated date of payment or fifteen days after acceptance of goods or services. The penalty interest charged to an MSME for late payment is three times the Reserve Bank of India’s declared bank rate.
- Electric bill reductions:
MSME Registration Certificate holders can get a discount on their electricity bill by submitting an application to the electrical department together with their MSME Registration Certificate.
- Reimbursement of ISO Certification Fees:
By submitting an application to the appropriate government, businesses with an MSME Registration Certificate can claim reimbursement for ISO Certification costs.
- Scheme for Excise Exemption:
MSME-registered businesses are eligible for Excise Exemption in the first year of operation, as specified in the Government’s Excise Exemption scheme and depending on company activities.
- Licenses, approvals, and registrations are quite simple to obtain:
It has made it very easy for firms with an MSME Certificate to receive licences, permissions, and registrations from the appropriate authorities in any field for their business, as they may provide the Certificate of MSME Registration when filing an application.
- Exemptions from direct taxes include the following:
MSME-registered businesses are eligible for Direct Tax Exemption in the first year of operation, as specified in the government’s policy and depending on the type of firm.
Documents Required for SSI MSME Registration
- Scan all of the Partners’ photos.
- All partners’ PAN cards must be self-attested and in colour.
- All partners’ self-attested and color-copied ID proof
- For proof of the Registered Office’s address, use an electricity bill, any other utility bill, or a bank statement.
- If there is a lease agreement for the business address, it must be signed.
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