MSME

MSME stands for micro, small and medium enterprises. Micro, Small and Medium Enterprises have emerged as a highly vibrant and dynamic sector of the Indian economy and have contributed enormously to the socio-economic development of the country. The Government of India has been encouraging and supporting the sector through various policies by providing subsidies, schemes and incentives to promote MSMEs.

TMSME Registration is voluntary under the MSMED Act, but to avail the benefits such as lower rates of interest, tax subsidies, power tariff subsidies, capital investment subsidies and other support from Central or State Government and the Banking Sector, MSME Registration is required. MSME registration can be obtained for manufacturing as well as service enterprises.

Registration Criteria

All manufacturing enterprises, whether Limited Liability Partnership, Company, Partnership firm, or any Undertaking are eligible for the registration. Following are the conditions which need to be fulfilled to qualify under MSME Act.

• An Enterprise in the Manufacturing sector needs to have less than Rs.10 crore of investment in plant & machinery.
• An Enterprise in service sector must have an investment below than Rs.5 crore of investment in plant & machinery.

Certification

Two stages of registration are carried out in all States. First, a provisional registration certificate is granted which is valid for 2 years. And after the commencement of production, a permanent registration certificate is granted.

Micro Enterprises

An Enterprise in the manufacturing sector with less than Rs.25 lakhs of investment in plant & machinery will be considered as Micro Enterprise.

An Enterprise in the service sector with less than Rs.10 lakhs of investment in plant & machinery shall be considered as Micro Enterprise.

Small Enterprise

An Enterprise in the manufacturing sector with more than Rs.25 lakhs but not exceeding Rs.5 crore of investment in plant & machinery will be considered as a Small Enterprise.

An Enterprise in the service with more than Rs.10 lakhs but not exceeding Rs.2 crore of investment in plant & machinery shall be considered as a Small Enterprise.

Medium Enterprise

An Enterprise in the manufacturing sector with more than Rs.5 crore but not exceeding Rs.10 crore of investment in plant & machinery will be considered as Medium Enterprise.

An Enterprise in the service sector with more than Rs.2 crore but not exceeding Rs.5 crore of investment in plant & machinery shall be considered as Medium Enterprise.

Benefits Of Registration

• Can enjoy Direct Tax Exemption in the initial year of business, as mention in the scheme by Government and depending on business activity.
• Can avail 50% subsidy for patent registration by making application to respective authority.
• Do have a preference in procuring government tenders. Special treatment is given to MSME Registered organization while making application for government tenders.
• Can obtain Licenses, approvals and registrations very easily for their business from the respective authorities as they can produce the Certificate of MSME Registration while making an application.
• Are eligible to avail benefit of 1% exemption on the interest rate on OD as mentioned in the scheme.
• Can avail Concession on electricity bill by making application to electricity department along with MSME Registration Certificate.
• Protection against the delay in payments from Buyers and right of interest on delayed payment through conciliation and arbitration and settlement of dispute be done in minimum time.
• Can enjoy multiple income taxes and capital gains tax subsidies from the government.
• The rate of Interest for registered MSME enterprise is lower as compared to other enterprises.
• ISO Certificate Expenses of registered MSME enterprise can be reimbursed by making application to respective authority.

Apart from the above benefits, the government has established a reservation policy, which reserves certain products, for exclusive manufacture by these enterprises, thus, protecting their interests, as well as providing impetus to the society by generating employment opportunities. The Government has put in place policies and has reserved three hundred fifty (350) products for purchase from MSMEs, under the Government Stores Purchase Programme. The registered MSME enterprise is eligible to avail the benefit of various subsidies, as mentioned in the scheme, provided by the central and state government.

MSME Registration Procedure

1 PREPARATION AND FILING OF APPLICATION

Preparing and Finalising the supporting documents required to be filed with the application

2 PREPARING AND FILING ONLINE APPLICATION

Preparing IE code application and filing the same along with supporting documents with the DGFT

3 APPLICATION PROCESSING

Once the IE code application along with the supporting documents is filed, the DGFT shall process and scrutinise the same.

Documents Required

Documents Required For MSME Registration

• Proof of Establishment (Sale Deed or Rent Agreement)
• Bank Statement or Cancelled Cheque
• Aadhar Card and Pan Card of the Authorized Person