The Micro, Small and Medium Enterprises (MSME) sector has popped-up as a high-yielding, vibrant, productive and the most dynamic sector of the Indian economy. These enterprises play a crucial role in providing ample employment opportunities, helping in industrialization of rural & backward areas, reducing the regional imbalances and assuring that there is an equitable distribution of the national income and wealth. They are complementary to the large industries as an ancillary unit and they contribute an enormous amount to the socio-economic development of the Indian economy. Though at times, they do need assistance and aid from the Government’s side as they are not well-equipped with the technology and resources. Therefore, the Government divises schemes, incentives, plans and rebates to this sector of the economy.
Classification of the enterprises into Micro, Small and Medium Enterprises (MSMEs) ?
The MSME Development Act, 2006 classifies the MSMEs into-
(a) Manufacturing Enterprises, and
(b) Service Enterprises.
|Upto Rs. 1 crore
|Between Rs. 1 crore and Rs. 10 crores
|Between Rs. 10 crores and Rs. 50 crores
|Upto Rs. 5 crores
|Between Rs. 5 crores and Rs. 50 crores
|Between Rs. 50 crores and Rs. 250 crores
Benefits of Getting Registered Under MSME Act, 2006
Indian Government has promoted the registration of Micro, small and medium enterprises (MSMEs) by providing various benefits to this sector. Such benefits can be availed only if the business had registered themselves as an MSME/SSI under MSME Act.
The MSME registration is not statutory but recommendatory. Though, the registration of company under the MSME act brings ample benefits to all types of enterprises. Any enterprise can reap the tree of benefits offered under the MSMED Act provided if the said company is registered under the said Act. Major benefits offered by the Central Government includes the following:
- Credit Guarantee Fund Trust for the Micro and Small Enterprises (CGTMSE) - Collateral free loans up to a limit of Rs. 200 lacs.
- Credit Linked Capital Subsidy Scheme for Technology Upgradation – This scheme aims at the facilitation of technology up-gradation by granting 15% up-front capital subsidy to the MSMEs.
- ISO 9000/ISO 14001 Certification Reimbursement Scheme – This scheme envisages the reimbursement of the charges of acquiring ISO9000/ISO-14001/HACCP certifications upto 75% of the expenditure subject to a maximum amount of Rs. 75,000 in each of the case.
- Micro Finance Programme.
- MSME Market Development Assistance (MDA).
- Exemption under Direct Tax and Statutory support such as reservation and the interest on Delayed payments Act.
- Excise exemption scheme.
- Easy sanction of bank loans (Priority sector lending).
- Lower rates of Interest.
Union government & State Government have their own box of benefits and incentives for MSMEs. These benefits include the following:
- various subsidies like tax, capital investment, power tariff and many other.
- Provide the development of specialized industrial estates.
Therefore, both the Centre and the State government are offerings various incentives and support packages to units who are registered with the MSME Act. Direct Taxes Law, Excise Law and Banking Laws, have incorporated the word "MSME" in their exemption notifications. Hence, the certificate of registration is issued by the MSME can be considered as a proof to avail the various benefits which are sanctioned for MSMEs. The registration is not yet made mandatory by the government but it is always beneficial to get your business registered under this Act. as it offers plenty of benefits in terms of setting up of business, credit facilities, taxation benefits, loans, etc. In Developing country like India, MSME industry helps in the economic growth of the country. and are considered as the backbone of the country.
It is recommended to approach MSME registration consultants in Delhi for the easy and smooth registration of the same as we all know that professionals are more versed with the MSME & related matters.
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