For promoting entrepreneurship, the government provides special benefits to the small businesses in the form of subsidies and incentives. Also, banks give loans at concessional rates to set up these businesses. For availing those, the small businesses need to register under Micro, Small and Medium Enterprises (MSMEs) act. If a business is registered under MSMEs act, it can avail several benefits like cheaper bank loans, tax benefits, preference during the tender process, and access to various schemes and incentives of government.
MSME stands for micro, small and medium enterprises and any enterprise that falls under any of these three categories. MSME enterprises are the backbone of any economy and are an engine of economic growth, promoting equitable development for all.
MSME enterprises of manufacturing sector can be categorized on the basis of amount invested in plant and machinery –
MSME enterprises in the service sector can be categorized on the basis of amount invested in equipment-
Aadhar number is now compulsory for registering under MSME act. An application is to be filed online using Udyog Aadhar Registration, and this can be verified using e-Aadhar OTP. Provisional registration is given in the initial five years if an entity hasn’t started its business yet. During this period, it can obtain loans from banks, and apply for various NOCs from regulatory bodies. Once the entity commences its operations, it can apply for a permanent license which has a lifetime validity, unless canceled.
Whether you’re the proud owner of a cutting-edge technology business or a masala packing company, employing rural women, credit and loan are something that your business will inevitably require for long- and short-term financing. Banks, by virtue of the directions issued by the Reserve Bank of India, have certain earmarked funds that have to mandatorily be given to MSME businesses. Producing this certificate entitles one to avail this loan on a priority basis with less hassles.
There are several benefits that can save lakhs of amount that may be assessable to tax in the absence of this certificate. The benefit of a presumptive basis of taxation is available to enterprises, which relieves one from maintaining detailed books of accounts and undergoing audit procedures.
The Ministry of Micro, Small and Medium Enterprises and the Small Industries Development Bank of India (SIDBI) have established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) specifically to implement Credit Guarantee Fund Scheme for micro and small enterprises. This scheme allows collateral-free loans of up to 50 lakhs for individual MSMEs.
Since the SSIs operate on a smaller scale, the Government makes sure that they do not die down due to the prevailing competition in the market. For this reason, it has reserved certain products that must be produced by the Micro, Small and Medium Enterprises only. Moreover, the Government stores are bound to purchase certain products like wooden furniture, jewelry, pickles, etc from these industries.
The Government helps the MSMEs against buyers that do not pay on time. During the supply of goods and services, if there is a date that has been mentioned in the agreement between the MSMEs and the buyers, the payment is supposed to make on or before it. If no due date has been mentioned, the buyer has to initiate the payment within 15 days after the goods and services have been accepted. No payment, however, shall exceed forty-five days after the goods and services have been supplied. In case the buyers do not comply with these provisions, they have to pay the penalty due to the delay in payments. The MSME registration makes sure the needs of small entrepreneurs like you aren’t compromised.
The MSME registration certificate can help you in trademark registration as well. It gives you the opportunity of having a 50% subsidy in the payment of fees while you’re registering for trademark or a patent.
The Government, helps the Micro, Small and Medium Enterprises in participating in foreign expo’s by providing financial assistance. This way, your export and import interests are well taken care of. MSME benefits like these motivate people to become entrepreneurs and run businesses successfully.
The MSME Form I is filed for furnishing the details with the ROC in respect to the payment outstanding for more than 45 days towards the services availed from the said MSME.
The Micro or Small Enterprises are small sized entities, defined in terms of their size of investment.
All the Companies i.e. public, private, listed or unlisted etc., who get supplies of goods or services from micro and small enterprises i.e MSME’s and whose payments to such MSME’s are overdue for more than forty five days from the date of acceptance or the date of deemed acceptance of the goods or service.
The date of acceptance means the date of actual delivery of goods or rendering of services. Further, where any objection is made in writing by the buyer regarding acceptance of goods or services within 15 (fifteen) days from the day of delivery of goods or the rendering of services, then the day on which such objection is removed by the supplier shall be the date of acceptance of goods and services.
In accordance with the M/o MSME (earlier M/o SSI) Notification no. S.O. 1642(E) dtd.29-09-2006 while computing the value of Plant and Machinery, the original Value of the machinery is to be taken in to account. The components, to be excluded while computing the value of Plant and Machinery, are detailed in the said notification.
PROMOTION OF MICRO AND SMALL ENTERPRISES” announced by Shri Mahabir Prasad, Minister of Small Scale Industries and Agro And Rural Industries In Lok Sabha on 27 February 2007 and on 2nd March 2007 in Rajay Sabha, provides for Credit Support, Fiscal Support, Support for Cluster Based Development ,Technologies and Quality Upgradation Support,Marketing Support, Supports for Entrepreneurial and Managerial Development Empowerment of Women owned Enterprises Strengthening of Prime Minister’s Rozgar Yojana (PMRY), Strengthening of data base for MSME sector.
As on date, 20 items are reserved for excusive manufacture in the Small Scale Sector. See List of Reserved items.
O/O DC (MSME) participates in a limited number of international exhibitions every year. For this purpose, Office of DC (MSME) books space, and selected SSI units are given the facility of free display space and free shipment of their exhibits from Mumbai to the fair and back. To get selected for participation, the unit must be registered and be producing goods, which are export worthy. A team of SISI Officers of your State who will recommend participation of your unit assesses export worthiness. Preference is given to units, which are ISO-9000 certified. You may also attend the fair in your individual capacity after availing shipment from O/O DC (MSME) at your own cost or through financial assistance under the Market Development Assistance (MDA) scheme of the Ministry of Commerce. O/O DC(MSME) has also launched its own scheme called MSME-MDA to encourage MSME entrepreneurs to participate more actively in international exhibitions.