Benefits of MSME Registration

 

MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy. MSME registration is a mandatory task for any business to start and operate in India. MSME categorized under two main categories, such as manufacturing enterprises and service enterprises.

MSME’s are rapidly growing with regular support from the government and youths who are inspired and bold enough to start their own venture. Therefore, knowledge about the registration process and its benefits is an absolute must in order to give a boost to the entrepreneurial spirit of MSME & SSI founders.

 Benefits of MSME Registration

1.     Bank Loans (Collateral Free):

The Government of India has made collateral-free credit available to all small and micro business sectors. This initiative guarantees funds to micro and small sector enterprises. Under this scheme, both the old as well as the new enterprises can claim the benefits. A trust named The Credit Guarantee Trust Fund Scheme was introduced by the GOI(Government Of India), SIDBI(Small Industries Development Bank Of India) and the Ministry of Micro, Small and Medium Enterprise to make sure this scheme is implemented (Credit Guarantee Scheme) for all Micro and Small Enterprise.

 

2.   Credit Linked Capital Subsidies for MSMEs:

Technology-driven MSMEs may not be able to use their resources to full potential due to lack of the latest technology. Under this scheme, MSMEs are provided upgraded technology to replace their old and obsolete ones. The Scheme aims to provide 15% capital subsidy for technology up gradations. There is also a ceiling in 15% capital subsidy which is 15 Lakh for induction of well-established and improved technology. It is given for in approved sub-sectors/products.

 

 

3.   Subsidy on Patent Registration:

A hefty 50% subsidy is given to the Enterprise that has the certificate of registration granted by MSME. This subsidy can be availed for patent registration by giving application to respective ministry.

 

4.   Low Interest rate on loan

Businesses or enterprises after obtaining MSME registration certificate can avail a benefit of 1% on the Overdraft loan and as per Union budget 2019 MSMEs registered under GST can get 2% interest subvention. It is available for incremental loans of Rs 1 crores under the MSME Credit Scheme

 

5.    ISO Certification Charges Reimbursement

The registered MSME enterprises can claim the reimbursement of the expenses that were spent for the ISO certification.

 

6.   Market Development Assistance Scheme for MSME :

Under this scheme, The Central Government follows a Price and Purchase Preference policy wherein around 358 items are listed for exclusive purchases by Central Government from the MSME units only. They are numerous support like marketing assistance even for those products, which are manufactured by MSMEs and do not fall under the purview of Reservation Policy.

 

7.    Tender Preference to MSME:

From time to time government has announced many tenders where only MSME Industries can apply. Recently, as a part of Covid-19 relief package, the Finance minister has announced that there are issues of unfair competition from foreign companies in government procurement tenders due to the size and strength differ and govt will not allow global tenders in such schemes up to Rs 200 crore.

 

 

8.   100% tax exemption for Innovative start-ups:

No Income Tax required to be paid in 3 year out of 7 Years – i.e. Start-ups are eligible for getting 100% tax exemption on profit for a period of three years in a block of seven years provided that annual turnover does not exceed Rs 25 crores in any financial year. It is allowed by way of Deduction under Income Tax Act. In this deduction, Companies up to 10 Years in existence are still considered start-up. Income Tax Law also allows credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years.

 

9.   Overdraft Interest Rate Exemption

Businesses or enterprises registered under MSME can avail a benefit of 1% on the Over Draft as mentioned in a scheme that differs from bank to bank.

 

10.                      Industrial Promotion Subsidy Eligibility

Enterprises registered under MSME are also eligible for a subsidy for Industrial Promotion as suggested by the Government.

 

11.Protection against Payments (Delayed Payments)

At times, the buyers of services or products from the MSME’s or Small Scale Industries tend to delay the payment. MSME ministry provided a helping hand to such enterprises by giving them the right to collect interest on the late payments from buyers. The settlement will be done through conciliation and arbitration and it will be resolved in minimum time.

Payment term are provided under this rules are-

1.   On or before the agreed date of payment or

2.   In case there is no mention of the date of payment, Within 15 days from the day they had accepted the goods and services from MSME or SCI registered business.

The Micro, Small and Medium Enterprises Development Act, 2006, has made strict provisions for charging of interest so that problem of delayed payment can be mitigated. In these provisions, if any buyer fails to make payment to MSMEs as per agreed terms or a maximum of 45 days, Buyer need to pay monthly compounded interest which is three times of the rate notified by the Reserve Bank of India.

 

12.                       Fewer Electricity Bills:

This concession is available to all the Enterprises that have the MSME Registration Certificate by providing an application to the department of the electricity along with the certificate of registration by MSME.

For More Details visit us:

Contact No. 9112211457

Email: help@msmeregistration.org

Website: www.msmeregistration.org