What is MSME?

MSME is an acronym for Micro, Small and Medium Enterprises. MSMEs are basically small-sized businesses defined in terms of their investment.

  • 40% of India’s gross industrial output is contributed by MSME.
  • 45% of India’s total export is from MSME.
  • India’s second largest Employer after Agriculture

Undoubtedly the MSME sector is India’s engine of growth. Considering the economic importance of this sector, Government of India has enabled a separate Act, Micro, Small & Medium Enterprises Development Act, 2006 (MSMED) on June 16, 2006, which was notified on October 2, 2006.

Who can apply?
Any entrepreneur having valid Aadhaar Number i.e Registration under MSME can be done by both Manufacturing Enterprise and Service Enterprise. They can be classified as follows on the basis of Annual Turnover:

ENTITY MICRO SMALL MEDIUM
Manufacturing/  Service Enterprise Upto Rs 5 crore More than 5 crore but upto Rs 75 crore More than Rs 75 crore but upto Rs250 crore

What are the benefits of registration?

Obtaining MSME registration is not mandatory and as at the sole discretion of the Entrepreneur. The units get registered to avail the below listed benefits which not only boost up their growth but also provide them with the required support:

1. Collateral Free loans from banks

2. Reservation policies to manufacturing / production sector

3. Very easy to get Licenses, approvals and registrations

4. Special consideration on international trade fairs:

5. Octroi benefits

6. Waiver of Stamp Duty and Registration Fees

7. Exemption under Direct Tax Laws

8. Bar Code registration subsidy

9. Subsidy on NSIC Performance and Credit ratings

10. Eligible for IPS subsidy

11. Counter Guarantee from Government of India through CGSTI

12. Protection against delay in payment

13. Reduction in rate of Interest from banks

14. 15% CLCSS subsidy to purchase fully

15. Waiver in Security Deposit in Government

16. Concession in electricity bills

17. Reimbursement of ISO Certification

18. Excise Exemption Scheme

19. Preference in procuring Government

20. P15% weightage in price Preference

21. 1% exemption on interest rate on OD

22. 50% subsidy for patent registration

How to get Registration?

Simple Step to obtained MSME/ SSI Certificate

1. Fill online Registration form

2. Make a Online payment by debit card, credit card, Net Banking

3. consultants will process on your application

4. After your documents verification successfully

5. Get certificate on your Email ID within 24 hours

DOCUMENTS REQUIRED

1. Aadhar Number

2. Name and Type of the Enterprise

3. PAN of the Enterprise

4. Mobile and Email of Applicant

5. Business Address Proof/Location

6. Nature of Activity and operation

7. Bank Account details

8. Partnership Deed/ MoA and AoA

Latest Updates

Relief for MSME Borrowers registered under Goods and Services Tax (GST)

Presently, banks and NBFCs in India generally classify a loan account as Non-Performing Asset (NPA) based on 90 day and 120 day delinquency norms, respectively. It has been represented to us that formalisation of business through registration under GST had adversely impacted the cash flows of the smaller entities during the transition phase with consequent difficulties in meeting their repayment obligations to banks and NBFCs. As a measure of support to these entities in their transition to a formalised business  environment, it has been decided that the exposure of banks and NBFCs to a borrower classified as micro, small and medium enterprise under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, shall continue to be classified as a standard asset in the books of banks and NBFCs subject to the following conditions:

The borrower is registered under the GST regime as on January 31, 2018.

The borrower’s account was standard as on August 31, 2017. The amount from the borrower overdue as on September 1, 2017 and payments from the borrower due between September 1, 2017 and January 31, 2018 are paid not later than 180 days from their  respective original due dates.

A provision of 5% shall be made by the banks/NBFCs against the exposures not classified as NPA in terms of this circular. The provision in respect of the account may be reversed as and when no amount is overdue beyond the 90/120 day norm, as the case may be. The additional time is being provided for the purpose of asset classification only and not for income recognition, i.e., if the interest from the borrower is overdue for more than 90/120 days, the same shall not be recognised on accrual basis.

Union Budget 2018

While the announcement of lower corporate tax to a wider base of medium, small and micro enterprises was welcomed by the sector, but the sop may provide only partial respite to the MSMEs.

In his speech for the Union Budget 2018, Finance Minister Arun Jaitley announced that the corporate tax rate that was lowered from 30% to 25% last year for companies with an annual turnover of up to Rs 50 crore will, this fiscal onwards be extended to with annual revenue of up to Rs 250 crore. The intent behind this move is to benefit a wider base of MSMEs and leave them with a “higher investible surplus which in turn will create more jobs”

Commenting that MSMEs are “major engine of growth and employment generation” while presenting Budget 2018, Finance Minister Arun Jaitley announced Rs 3794 crore allocation to MSME sector for credit support, capital and interest subsidy on innovation.

ISO CERTIFICATION

The Ministry is implementing the ISO: 9001/14001/HACCP Certification Reimbursement Scheme for Micro & Small Enterprises (MSEs) for reimbursement of certification expenses, only to those MSEs which have acquired Quality Management Systems (QMS)/ISO 9001 and /or Environment Management Systems (EMS)/ ISO14001and / or Food Safety Systems (HACCP) Certification. Under the scheme provides reimbursement of 75% of the certification expenses up to amaximum of Rs.75,000/- (Rupees seventy five thousand only) to each unit as one-time reimbursement only to those MSEs which have acquired Quality Management Systems (QMS)/ISO 9001 and /or Environment Management Systems (EMS)/ ISO14001and / or Food Safety Systems (HACCP) Certification.

What are Government incentive for MSME

1. Marketing Assistance scheme for providing marketing support to MSMEs i.e.

– to enhance the marketing competitiveness of MSMEs.

– to provide them a platform for interaction with the individual/institutional buyers;

– to update them with prevalent market scenario

–  for capturing the new market opportunities

2. Domestic Market Promotion Scheme to expand domestic markets

– Establishment and Maintenance of Showrooms & Sales Depots

– Participation in Domestic Exhibitions.

3. Export Market Promotion to improve the export performance through:

– participation in seminars and conferences

– organising participation in international fairs;

– Publicity abroad

– extending financial assistance

4. Credit Guarantee Trust Fund for Micro & Small Enterprises (CGT SME)- Collateral free loan up to a limit of Rs. 100 lakh is available for individual MSE on payment of guarantee fee to bank by the MSE.

5. Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)- it provides 15% subsidy for additional investment up to Rs. 1 cr for technology upgradation by MSEs.

6. Technology and Quality Upgradation Support to MSMEs- use of energy  efficient technologies (EETs) in manufacturing units. Following assistance will be provide:

– Funding support

– Setting up of Carbon Credit Aggregation Centres.

– Encouraging MSMEs to acquire product certification / licenses from National / International bodies etc.

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One response to “MSME- Overview, Registration and incentives”

  1. Abhinav says:

    Whether Trading concerns falls in MSME definition on Turnover basis

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