Micro, Small and Medium Enterprises(MSME)

What is MSME Registration?

Micro, Small, and Medium Enterprises (MSME) Registration is a process that provides official recognition to businesses operating in the MSME sector in India. The registration is governed by the Ministry of Micro, Small, and Medium Enterprises and offers various benefits, including access to subsidies, tax incentives, and easier loan approvals.

Classification of MSMEs

Under the MSME Development Act, 2006, the classification is based on the investment in plant and machinery for manufacturing enterprises and investment in equipment for service enterprises. The classification criteria were revised in 2020:

1. Micro Enterprises(Manufacturing and Services):   Investment up to INR 1 crore and turnover up to INR 5 crore.


2. Small Enterprises(Manufacturing and Services):   Access to funding through the Fund of Funds for Startups (FFS) and other government schemes.


3. Medium Enterprises(Manufacturing and Services):   Various tax exemptions, including a three-year tax holiday and exemption from capital gains tax.

Benefits of MSME Registration

1. Access to Credit:  
   
   
   • Easier access to bank loans with lower interest rates.
   
   
   • Priority sector lending by banks.
   
   
   • Collateral-free loans under the Credit Guarantee Scheme.
   
   


2. Subsidies and Tax Benefits:
   
   
   • Various subsidies and tax exemptions.
   
   
   • Exemption from excise and certain direct taxes in the initial years.
   
   


3. Government Tenders:
   
   
   • Preference in government procurement.
   
   
   • Relaxation in eligibility criteria for tenders.
   
   


4. Infrastructure Support:
   
   
   • Access to infrastructure facilities like industrial estates, business incubators, and testing labs.


5. Patent Registration and Industrial Promotion:
   
   
   • Financial support for patent registration.
   
   
   • Concessions and incentives for participating in trade fairs and exhibitions.
   
   


6. Protection Against Delayed Payments:
   
   
   • Protection against delayed payments from buyers.
   
   
   • Interest on delayed payments and a faster dispute resolution process.
   
   


7. Market Assistance and Export Promotion:
   
   
   • Support for marketing and export promotion activities.
   
   
   • Participation in international trade fairs and buyer-seller meets.
   
   

Required Documents for MSME Registration

1. Aadhaar Card:   Aadhaar number of the entrepreneur.


2. PAN Card:   PAN card of the business entity or individual.


3. Business Details:
   
   
   • Name of the business and type of organization.
   
   
   • Address, bank account details, and business activities.


4. Investment and Turnover Details:
   
   
   • Information about the investment in plant and machinery/equipment.
   
   
   • Turnover details of the previous financial years.
   
   


5. Bank Account Details:   Bank account number and IFSC code of the business.

Conclusion

MSME registration provides numerous benefits that can help businesses grow and thrive in a competitive market. By obtaining MSME registration, businesses can access credit, subsidies, tax benefits, and various other supports that facilitate their development and expansion. For more detailed information or assistance with the MSME registration process, feel free to contact us at ATHWISE Services Private Limited. Our expert consultancy team can guide you through the registration process and help you leverage the benefits of being recognized as an MSME.

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