Benefits of MSME Registration

Definition:

MSME stands for Micro, Small and Medium Enterprises

For Enterprises occupied in the manufacture or production, processing or preservation of goods, the definition is:
 

Micro-Enterprise: An enterprise where investment in a plant as well as machinery doesn’t surpass Rs. 25 lakh.
 

Small Enterprise: An enterprise where the investment in a plant as well as machinery is above Rs. 25 lakh but doesn’t surpass Rs. 5 crore.
 

Medium Enterprise:  An enterprise where the investment in a plant as well as machinery is above Rs.5 crore but doesn’t surpass Rs.10 crore.
For the above enterprises, investment in plant and machinery is the original cost which excludes land and building and additional items as specified by the Ministry of Small Scale Industries.
 

For Enterprises occupied in giving or rendering of services, the definition is:
 

Micro-Enterprise: An enterprise where the investment in equipment doesn’t surpass Rs. 10 lakh.
 

Small Enterprise: An enterprise where the investment in equipment is above Rs.10 lakh but doesn’t surpass Rs. 2 crores.
 

Medium Enterprise: An enterprise where the investment in equipment is above Rs. 2 crores but doesn’t surpass Rs. 5 crore.
 

MSME Registration
 

MSME stands for micro, small and medium enterprises and any of the enterprise that comes under these three categories. MSME additionally share a major portion of industrial production as well as exports in India and has an essential role in the development of an industrial economy.
 

Towards promoting and developing MSMEs; the MSMED Act of India allows the promotion and development of firms through many inducements, schemes, and subsidies. For the getting the benefits under the MSMED Act, MSME Registration is necessary and proprietorship firms, partnership firms; LLPs, Private Limited Company’s and Public Limited Companies could register.
 

Registration Procedure:
 

•    For registration of the small and medium scale industry, the owner is required to fill a single form which he could do online or offline.
 

•    If an individual wants to do registration for more than one industry then that person could do individual registration.
 

•    For the registration, an individual is required to fill a single form which is available at the website.
 

•    The document which is required for the registration is Personal Aadhar number, Industry name, Address, bank account details, and a few common information.
 

•    In this, the individual could provide self-certified certificates.
 

•    There are no registration fees required for this procedure.
 

•    Once the detail-filled and uploaded the individual would be getting the registration number.

Benefits of MSME Registration:
 

Online MSME registration permits the firms to claim several benefits offered by the Governments under the MSMED Act. The benefits of MSME Registration are:
 

Subsidized Loan Support
 

The finance could be availed based on this registration with a lower rate of interest. To support these financial requirements of MSME sector in a better way, the Government has participated to simplify the fundraising through registered institutions which include SIDBI (Small Industries Development Bank of India) and State Financial Corporations. The government additionally extends the financial assistance towards MSME in form of Pradhan Mantri MUDRA Yojana (began in April 2015). Micro Units Development & Refinance Agency Limited (MUDRA) is set up for refinancing activities relating to micro units. 
 

Rebate on Trademark Application
 

The enterprises which have obtained the MSME Registration certificate could get a 50% rebate of the Government Fees in the course of the registration of the trademark. The Government fee set for the partnership firms, LLPs and Companies and so forth is Rs 9000 for online Trademark Registration Application. However, in such case, the enterprise could get itself registered under the Act and claim rebate based on the MSME certificate.
 

Repayment Period
 

By the implementation of the Goods and Services Tax laws the existence of the micro, small and medium firms is formalized through their registration.  The stated formalization has adversely affected the cash flow that directed towards difficulties in repayment of the obligations. Reserve Bank of India, has liberalized the criteria of the asset classification for MSME firms registered under GST as on 31st January 2018. If the amount payable towards banks or other financial institutions are unpaid for a period not surpassing 180 days, it is classified as Standard Assets by the banks. Also to get benefited by the above condition, the said firm would also be accounted as Standard Assets as on the 31st day of August 2017.
 

Credit Guarantee Scheme
 

In Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE) which is likewise known as a Credit Guarantee Scheme presents the credit and income input from various sources towards supporting the small scale industries which are under difficulty. The Credit Guarantee Fund Scheme for MSME was launched through the Government to make available collateral-free credit towards the MSME sector. Both the existing and the new firms are eligible for being covered under the scheme. The Ministry of MSME’s, Government of India and Small Industries Development Bank of India (SIDBI), established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for implementing the Credit Guarantee Fund Scheme for MSME’s.
 

Concession in electricity bills:
 

The firms that have MSME Registration Certificate could avail concession on electricity bill by means of making application towards electricity department with MSME Registration Certificate.
 

Reimbursement of ISO Certification charges
 

The firms that have MSME Registration Certificate could claim reimbursement of ISO Certification expenses through making application towards respective authority.

Other benefits and Schemes of MSME Registration are
 

•    The registered enterprise could get protection against the delayed payments from the buyers and the buyers are also responsible to make the payment on time
 

•    MSME firms might manufacture any product. 
 

•    A Council 'Micro and Small Enterprises Facilitation Council' has been established for timely resolution of concerns with the consumers
 

•    Market Development Assistance for MSME's
 

•    Upgradation support in the technology as well as Quality support for the MSME
 

•    Online sanction of loans is also made through Trade Electronic Receivable Discounting System (TReDS) platform
 

•    Subsidies from the government for small business for cold chain
 

•    Tariff subsidies on Power, Excise exemption and regulations, Subsidy on Capital investment, and so forth.
 

Click here to know more about Budget 2019 MSME Highlights

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Author:

eStartIndia Team