MSME (Micro Small & Medium Enterprise)

MSME Registration and its benefits

1. What is MSME?

MSME stands for micro, small and medium enterprises (MSME). This sector, comprising of manufacturing, infrastructure, service industry, food processing, packaging, chemicals, and IT, has emerged as the most vibrant and dynamic engine of growth of Indian economy over the past few decades.

(Activities not covered under MSME. Click here)

2. Registration under MSME.

Since September, 2015, in view of promoting ease of business, an online filing system under Udyog Aadhar Memorandum (UAM) based on self-declared information has been put in place. Registration under UAM is free.

Link: https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx

*Both conditions are compulsory

Note: While computing the total investment, the original investment (purchase value of items) is to be taken into account excluding the cost of pollution control, research and development, industrial safety devices, and such other items as may be specified, by notification of RBI.

For E.g.: If an enterprise started with a set of plant and machinery purchased in 2008 worth ₹ 70.00 lakh has procured additional plant and machinery in the year 2013 worth ₹ 65.00 lakh, then the total investment in Plant & Machinery may be treated as ₹ 135.00 lakh.

3. Documents required for MSME registration.
   1. Aadhaar Card
   2. PAN Card
   3. Registration certificate of Business, if any;
   4. Address of Manufacturing plant or Registered office;
   5. Bank Account details
   6. Details of Product/Services

Note 1: The Proprietor in the case of a proprietary firm, managing partner in the case of a partnership firm and a Karta in the case of a Hindu Undivided Family (HUF), shall provide his Aadhaar Number in the memorandum;

If your Mobile Number is not linked with Aadhaar then select one of the following options:

1. List of Aadhaar Enrolment Centres to update / link Mobile no. Click here
2. Visit District Industries Centre (DIC) Office for Assisted Filling.
3. Submit Application Details using Government Approved photo ID Proof (Except Aadhaar Card). Ministry will validate it and then Udyog Aadhaar will be issued in due course.

Note 2: One applicant can have more than one enterprises doing business and each one can be registered for a separate Udyog Aadhaar and with the same Aadhaar Number as Enterprise 1 and Enterprise 2 etc.

Note 3: After registration MSMEs are to furnish information relating to their enterprises online to the Central Government in the data bank maintained by it at www.msmedatabank.in.

4. Benefits for a registered MSME.

1. a. Under COVID stimulus package:
   1. i. ₹ 50,000 Crore Equity Infusion for MSMEs through fund of funds;
   2. ii. ₹ 3 Lakhs Crore Collateral free Automatic loan. (Loan duration 4 year with moratorium for 12 months i.e. no Principal repayment for 12 months;
   3. iii. ₹ 20,000 Crore to be infused as subordinate debt for stressed MSME;
   4. iv. Etcetera.
2. b. Prevailing benefits:
   1. i. Subsidized loans from banks with low interest rates
   2. ii. Tax benefits specifically given to these enterprises under Income Tax and Goods and Service Tax (GST) in the form of rebates and concessions.
   3. iii. The MSME holders also get rebate and concessions on registration of Trademark and Patents. (upto 50%)
   4. iv. Eligible for Industrial Promotion subsidy;
   5. v. Right to manufacture the products reserved for these enterprises
   6. vi. Upto 1% exemption on the interest rate on overdraft;
   7. vii. Protection against delayed payments – Section 15 of MSME Act, 2006 mandates payment of supply maximum within 45 days;
   8. viii. Reimbursement of ISO Certification charges: Under this scheme, 75% of the certification expenses up to maximum amount of ₹75,000 to acquire ISO certification are reimbursed for each unit.
   9. ix.There are many tenders which are open only for MSME industries;
   10. x. Import of Capital Goods on zero duty subject to meeting export obligations;
   11. xi. Concession in Electricity Bills – Under this scheme, enterprises having MSME Registration can avail a concession in electricity bills by making an application to Electricity board along with MSME Registration Certificate.

Note: The above benefits are available on making application to the concerned ministry/authorities.

Note 2: Some benefits are available only in the initial year of enterprise.

5. Estimated numbers of MSMEs in the country.

As per the National Sample Survey (NSS) 73^rd round, conducted by National Sample Survey Office, Ministry of Statistics & Programme Implementation during the period 2015-16, there were 633.88 lakh unincorporated non-agriculture MSMEs in the country engaged in different economic activities

- 196.65 lakh in Manufacturing,

- 0.03 lakh in Non-captive Electricity Generation and Transmission

- 230.35 lakh in Trade and

- 206.85 lakh in Other Services

excluding those MSMEs registered under (a) Sections 2m (i) and 2m (ii) of the Factories Act, 1948, (b) Companies Act, 1956 and (c)construction activities falling under Section F of National Industrial Classification (NIC) 2008.

(Source: MSME Annual report 2018-19)

6. Disclaimer

• The above information is published in public interest and does not qualify as opinion or promotion.
• The above information is based on facts and figures available in public domain. The undersigned shall not be held liable for any incorrect fact based on public domain search.

Compilation by:

CA. Saurabh Verma

mailto:[email protected]?subject=MSME Enquiry