MSME sector is the backbone of Indian Economy. It generates huge employment in India. The Government of India also wants to empower the MSME Industries. Various steps are being taken by Government to enhance MSME Industry. Out of many, today we will discuss 2 major steps, which are taken in the Form of Udyam Registration and MSME Samadhan. If these tools are effectively utilized then they have power to save MSME Enterprises to be exploited by big enterprises.
What is Udyam Registration?
Udyam Registration is an online registration process launched by the Ministry of Micro, Small, and Medium Enterprises (MSME) in India. It is a unique identification number given to an enterprise that is registered under the MSME Act. Udyam Registration provides various benefits, including financial assistance, marketing support, and legal protection.
Documents Required for Udyam Registration
√ PAN Card of Firm/ Proprietor
√ GST Number Details If registered
√ Bank Details of Firm
√ Aadhar Number of Proprietor/ Authorised Person
√ Value of Plant and Machinery Details that are of filed in ITR
Benefits of Udyam Registration
Udyam Registration offers several benefits to small and medium enterprises, which are as follows:
Financial Benefits in Form of Mudra Loans
Udyam-registered enterprises can avail themselves of collateral-free loans from banks and financial institutions at lower interest rates. They will get preference in allotting Mudra Loans.
Priority sector lending:
Udyam-registered enterprises are eligible for priority sector lending, which provides easier access to credit at lower interest rates.
Increase Visibility
Udyam-registered enterprises are listed on the official website of the MSME Ministry, which provides them with greater visibility and marketing support. Government departments have to give preference to Udyam Registered firms while procuring any items for their use.
Government tenders
Udyam-registered enterprises are eligible to participate in government tenders reserved for MSMEs.
No Need to deposit Earnest Money Deposit (EMD):
Udyam-registered enterprises are exempted from paying EMD while participating in government tenders.
Protection against delayed payments
Udyam-registered enterprises can file complaints against buyers who delay payments for goods and services delivered.
Lower fees for trademark and patent registration:
Udyam-registered enterprises are eligible for reduced fees for trademark and patent registration.
After filing your application with above mentioned documents the Udyam Registration number will be generated, and the certificate will be issued.
MSME Samadhan
Now, move to next point, where will be discuss, how can we take benefit of Udyam Aadhar.
If you are a Udyam registered enterprises and your funds from your debtors are outstanding for more than 45 days then you have the option to file complain against that debtor in MSME Samadhan.
MSME Samadhan is a portal launched by the Ministry of Micro, Small and Medium Enterprises (MSME) to provide a platform for small businesses to file their grievances related to delayed payments or non-payment. The portal facilitates the resolution of disputes between buyers and suppliers through conciliation and arbitration.
Eligibility for MSME Samadhan Registration
To register complain on the MSME Samadhan portal, an enterprise must have a valid Udyog Aadhaar Number (UAN) and must have a grievance related to delayed payment or non-payment. It should be taken care that you have not initiated any legal proceedings in any court or tribunal for the same grievance.
Benefits of Fling complain under MSME Samadhan
A quick and effective resolution of disputes related to delayed payment or non-payment. No cost for filing a case on the portal. The process is transparent and non-bureaucratic. A dedicated team of experts to facilitate the resolution process
Encourages timely payment and improves cash flow for SMEs
What happens after Filing a Case on MSME Samadhan Portal
After filing a case on the MSME Samadhan portal, the following steps are involved:
The system sends an email and SMS notification to the buyer regarding the case. The buyer has to respond to the case within 15 days of receiving the notification.
If the buyer agrees to the claim, the payment will be released to the supplier within 45 days from the date of acceptance. If the buyer disputes the claim, a conciliation process will be initiated.
If the conciliation fails, legal proceedings will be initiated against the defaulting debtors.
Benefits Under Income Tax Act 1961
In Budget 2023, a big announcement has been made by Finance Minister where they have inserted a new clause, where it is made mandatory that payment to MSME Registered enterprises should be made within 45 days. If default is made in payment within 45 days, then that expense will be not allowed under Income Tax Act and the person has to pay extra taxes if payment is not made within specified time period.
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Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s personal experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers. The Author “CA. Shiv Kumar Sharma” can be reached at mail –[email protected] and Mobile/Whatsapp–9911303737
Author Bio
SAMADHAN scheme remains on the portal without any further action even after No Response from the Defauler Buyer within 15 days. Thereafter the suffering Supplier MSE remains at the mercy of State MSEF Council which does not abide by the time limits as per Section 18(5) of The MSMED Act, 2006….thereby defeating SAMADHAN Scheme;