Enterprises that have MSME Registration Certificate can avail
50% subsidy for patent registration by making application to respective authority
MSME
Micro Small and Medium Enterprises
MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy.
Know MSME >>
MSME Certification Benefits >>
Filing Requirement >>
MSME FAQ >>
Know MSME >>
MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy.
The MSME sector contributes to 45% of India’s Total Industrial Employment, 50% of India’s Total Exports and 95% of all industrial units of the country and more than 6000 types of products are manufactured in these industries (As per msme.gov.in). When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries or SSI’s.
What are Micro, Small and Medium Enterprise?
The existing MSME classification was based on the criteria of investment in plant and machinery or equipment. So, to enjoy the MSME benefits, the MSMEs have to limit their investment to a lower limit, as mentioned below:
| Existing MSME Classification | ||||
| Sector | Criteria | Micro | Small | Medium |
| Manufacturing | Investment | < Rs.25 lakh | < Rs.5 crore | < Rs.10 crore |
| Services | Investment | < Rs.10 lakh | < Rs.2 crore | < Rs.5 crore |
These lower limits are killing the urge to grow as they are unable to scale their businesses further. Also, there has been a long-pending demand for the revision of MSME classification so that they can further expand their operations while continuing to avail the MSME benefits.
Now, under the Aatmanirbhar Bharat Abhiyan (ABA), the government revised the MSME classification* by inserting composite criteria of both investment and annual turnover. Also, the distinction between the manufacturing and the services sectors under the MSME definition has been removed. This removal will create parity between the sectors. The following is the revised MSME classification*, where the investment and annual turnover, both are to be considered for deciding an MSME.
| Revised MSME Classification | |||
| Criteria | Micro | Small | Medium* |
| Investment & Annual Turnover | < Rs.1 crore & < Rs.5 crore | < Rs.10 crore & < Rs.50 crore | < Rs.50 crore & < Rs.250 crore |
MSME Certification Benefits >>
Benefits of MSME / Udyog Aadhaar Certificate in India
Collateral Free Loans from Bank:
The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) was launched by the Government of India to make available collateral-free credit to the micro and small enterprise sector. Both the existing and the new enterprises are eligible to be covered under the scheme. The Ministry of Micro, Small and Medium Enterprises, 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) to implement the Credit Guarantee Fund Scheme for Micro and Small Enterprises
Reservation Policies to Manufacturing / Production Sector:
Reservation of items for exclusive manufacture in SSI sector statutorily provided for in the Industries (Development and Regulation) Act, 1951, has been one of the important policy measures for promoting this sector.
The Reservation Policy has two objectives
Ensure increased production of consumer goods in the small scale sector Expand employment opportunities through setting up of small scale industries
Very Easy to get Licenses, Approval and Registrations:
It has made very easy for enterprises that are having MSME Certificate to obtain Licenses, approvals and registrations on any field for their business from the respective authorities as they can produce the Certificate of MSME Registration while making application.
Special Consideration on International Trade Fare:
Under the International Cooperation Scheme, financial assistance is provided on reimbursement basis to the State/Central Government organizations, industries/enterprises Associations and registered societies/trusts and organizations associated with MSME for deputation of MSME business delegation to other countries for exploring new areas of MSMEs, participation by Indian MSMEs in international exhibitions, trade fairs, buyer seller meet and for holding international conference and seminars which are in the interest of MSME sectors
Octroi Benefits:
The scheme of refund of octroi provided under the Package Scheme of Incentives, 1993 will be included in the new Scheme up to 31-3-2006 on the same pattern. Where account-based cess or other levy is charged instead of or in lieu of octroi, such change will also be eligible for refund as in the case of octroi.
Waiver on Stamp Duty and Registration Fees:
At present, IT units in public IT Parks are exempted from stamp Duty and Registration fees upto 31st March 2006. Now all new industrial units having MSME Registration and expansions will be exempted from payment of Stamp Duty and Registration fees
Exemption Under Direct Tax Laws:
Enterprises that have MSME Registration can enjoy Direct Tax Exemption in the initial year of business, as mention in the scheme by Government and depending on business activity.
Bar Code Registration Subsidy:
Enterprises that have MSME Registration can avail Bar Code Registration subsidy as mentioned in the scheme
Subsidy on NSIC Performance and Credit Ratings:
Enterprises that have MSME Registration can avail Subsidy on NSIC Performance and Credit ratings as mentioned in the scheme
Eligible for IPS Subsidy:
Enterprises that have MSME Registration are eligible for Industrial Promotion Subsidy (IPS) as mentioned in the scheme
Counter Guarantee through Government of India CGSTI:
Enterprises that have MSME Registration are eligible for Counter Guarantee from Government of India through CGSTI.
Protection Against Delay in Payment:
The Ministry of Micro, Small and Medium Enterprises gives protection to MSME Registered Business against 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.
If any micro or small enterprise that has MSME registration, supplies any goods or services, then the buyer is required to make payment on or before the date agreed upon between the buyer and the micro or small enterprise. In case there is no payment date on the agreement, then the buyer is required to make payment within fifteen days of acceptance of good or services. Further, in any case, a payment due to a micro or small enterprise cannot exceed forty-five days from the day of acceptance or the day of deemed acceptance. In case of failure by the buyer to make payment on time, the buyer is required to pay compound interest with monthly interest rests to the supplier on that amount from the agreed date of payment or fifteen days of acceptance of goods or service.
The penal interest chargeable for delayed payment to a MSME enterprise is three times of the bank rate notified by the Reserve Bank of India
Reduction in Rate of Interest from Banks:
The rate of Interest for enterprise that has MSME registration are lower as compare to other enterprises. Certain targets are set for banks’ lending to the Micro and Small Enterprises. The banks’ have to achieve a 20% growth in credit to micro and small enterprises and 10% annual growth in the number of micro enterprises accounts and 60% of total lending to Micro and Small Enterprises sector. The banks have to follow the following:
1. 40% of the total advances must go to micro and small enterprises involved in manufacturing having investment in plant and machinery up to Rs.10 lakh and for service enterprises having investment in equipment up to Rs.4 lakh.
2. 20% of the total advance to micro and small enterprises should go to manufacturing enterprises that have above Rs.10 lakh till Rs.25 lakh investment in the plant and machinery and for service enterprises that have investments in equipment above Rs.4
3. To simplify, 60% of the advances must go to micro enterprises.
15% CLCSS Subsidy to Purchase Fully:
The Ministry of Micro, Small and Medium Enterprises is operating a scheme namely “Credit Linked CGSTI Subsidy Scheme (CLCSS) for technology upgradation of Micro and Small Enterprises. The scheme was launched in October-2000 and revised from 29.9.2005. The revised scheme aims at facilitating technology upgradation of Micro and Small Enterprises (MSEs) by providing 15% capital subsidy (limited to maximum Rs.15 lakhs) for purchase of Plant & Machinery. Maximum limit of eligible loan for calculation of subsidy under the scheme is Rs.100 lakhs. Presently, more than 1500 well established/improved technologies under 51 sub-sectors have been approved under the Scheme
Waiver in Security Deposit in Government:
The Ministry of Micro, Small and Medium Enterprises gives following benefits to enterprises that has MSME Registration while making application for Government Tenders:
1. Issue of tender sets free of cost
2. Exemption from payment of Earnest Money
3. Waiver of Security Deposit upto the Monetary Limit for which at the unit is Registered
Concession in Electricity Bill:
Enterprises that have MSME Registration Certificate can avail Concession on electricity bill by making application to electricity department along with MSME Registration Certificate
Reimbursement of ISO Certification:
Enterprises that have MSME Registration Certificate can reimburse ISO Certificate Expenses by making application to respective authority along with MSME
Excise Exemption Scheme:
Enterprises that have MSME Registration can enjoy Excise Exemption in the initial year of business, as mention in the Excise Exemption scheme by Government and depending on business activity.
Preference in Procuring Government:
Enterprises that have MSME Registration have preference in procuring government tenders. Special treatment is given to MSME Registered organization while making application for government tenders.
P15% weightage in Price Preference:
Enterprises that have MSME Registration can avail 15% weightage in price Preference as mentioned
1% exemption on interest rate in OD:
Enterprises that have MSME Registration can avail benefit of 1% exemption on interest rate on OD as mentioned in the scheme
50% subsidy for Patent Registration:
Filing Requirement >>
Filling Requirement for MSME / Udyog Aadhaar Certificate
MSME / Udyog Aadhaar Certificate required follwing cheklist before Apply
- Applicant Name : Applicant Are Required To Enter His / Her Name As Mentioned On Aadhaar Card, Issued By UIDAI.
- Mobile Number : Applicant Are Required To Enter His / Her Indian Mobile Number.
- Email Id : Applicant Are Required To Enter His / Her Email Id, As Certificate And Acknowledgement Will Be Send To Registered Id.
- Plant Address : Applicant Are Required To Enter His / Her Complete Plant Address With State And Pincode.
- Office Address : Applicant Can Enter His / Her Complete Office Address With State And Pincode.
- Annual Turnover : Applicant Can Enter His / Her Annual Turnover.
- Social Category : Applicant Can Select Social Category.
- Aadhaar Number : Applicant Can Enter His / Her 12 Digit Aadhaar Number.
- Pan Card Number : Applicant Have To Enter His / Her Pan Card Number.
- Bank Account Number : Applicant Can Enter His / Her Bank Account Number.
- Ifsc Code : Applicant Can Enter His / Her Bank Ifsc Code.
- Date Of Commencement Of Business : Applicant Have To Select The Date Of Business Started, As It Will Get Printed On Certificate.
- Type Of Organization : Applicant Have To Select The Type Of Organization, As It Will Get Printed On Certificate.
- Main Business Activity Of Enterprise : Applicant Can Select The Main Business Activity.
- Additional Details About Business : Applicant Can Enter Additional Details About Business. (For Example – Manufacturing Of Food Products, Computer Programming)
- Number Of Employees : Applicant Can Enter Number Of Workers In His / Her Firm.
- Investment In Plant & Machinery / Equipment : Applicant Can Enter The Total Investment Made In Plant, Machinery, And Equipment, Etc. To Start His / Her Business.
MSME FAQ >>
FAQ’s Related to MSME / Udyog Aadhaar Certificate in India
What is MSME:
Micro Small and Medium Enterprises (MSMEs) are defined in India under the MSMED Act 2006 based on capital investment made in plant and machinery, excluding investment in land
and buildings.
What are the different NSIC and MSMEs?
NSIC is the National Small Scale Industries Corporation, it is known for its role in procuring raw materials in bulk from small businesses (or MSMEs). … NSIC is a GOI (Government of India) body and part of the MSME Ministry. MSME refers to micro, small and medium enterprises.
Is Udyog AADHAR card compulsory?
The Aadhaar Udyog process doesn’t need to have an Aadhaar number to register MSME under the offline process. Udyog Aadhaar registration can be done online by individuals if they have an Aadhaar number.
What is MSME Registration for?
To be classified as MSME, manufacturing sector enterprises require less than Rs 10 crore investment in plant and machinery; Service enterprises should invest less than Rs 5 crore in plant and machinery.
What are the different SSI and MSMEs?
In the early days of a business, entrepreneurs look for a license to get their business recognized by the government. One of the easy registrations to be given is MSME or SSI registration or Micro, Small and Medium Enterprise Registration or Small Scale Industry Registration.
What are the Document Required for MSME registration?
Aadhaar Card
PAN Card (compulsory for LLP, Private Limited, Pub Limited)
Description Description (ifsc and a / c number only)
Information about your business
What is the GST registration scheme for MSMEs?
Yes, there is no such exemption for MSMEs in GST. Any business whose turnover in the financial year exceeds Rs. 20 lakhs (Rs. 10 lakhs for North Eastern and the Hill States). Every person who is registered under the earlier law (ie, excise duty, VAT, service tax, etc.) will also have to register under GST.
What is the validity of MSME certification?
The Provisional Registration Certificate (PRC) will be valid for a fixed period of 5 years from the date of issue of PRC. In other words, the PRC will automatically default at the end of 5 years from the date of issue of the certificate or the date of commencement of production by the unit, whichever is earlier.
What can MSME do for Load?
But, before you apply for a loan, you should be aware of all the MSME loan eligibility criteria set by financial institutions. Although this varies from one lender to another, there are some general criteria: You must be an Indian citizen between 25-55 years old. Your business must have at least 3 years of vintage
