Who is a MSME ?
For Manufacturing Sector :
- Micro Enterprises: Where the investment in plant and machinery does not exceed Rs.25 lakhs
- Small Enterprises: Where the investment in plant and machinery is more than Rs.25 lakhs but does not exceed Rs.5 Cr
- Medium Enterprises: Where the investment in plant and machinery is more than Rs.5 Cr. but does not exceed Rs.10 Cr.
For Service Sector :
- Micro Enterprise: Where the investment in equipment does not exceed Rs.10 lakhs
- Small Enterprises: Where the investment in equipment is more than Rs.10 lakhs but does not exceed Rs.2 Cr
- Medium Enterprises: Where the investment in equipment is more than Rs.2 Cr but does not exceed Rs.5 Cr
What are the Benefits of Registration as a MSME ?
- Eligibility for lower rates of interest : Enterprises that have MSME Registration can avail benefit of 1% exemption on interest rate on OD.
- Export incentives scheme : The Foreign Trade Policy supports the MSMEs by offering specific incentives such as Interest Equalization scheme, under which all exporters who are MSMEs across all ITC (HS) codes are granted 3% rate subvention for pre and post shipment Rupee Export Credit with effect from 1st April, 2015 for five years.
- Income Tax Exemption : There are several benefits that can save lakhs of amount that may be assessable to tax in the absence of this certificate. The benefit of a presumptive basis of taxation is available to enterprises, which relieves one from maintaining detailed books of accounts and undergoing audit procedures
- Power tariff subsidies : Enterprises that have MSME Registration Certificate can avail Concession on electricity bill by making application to electricity department along with MSME Registration Certificate.
- Capital investment subsidies : Capital Investment subsidy will be eligible only on Loan Amount disbursed by the Bank/Institution. In Municipal Corporation Areas: Subsidy @ 10% of term loan amount disbursed by the bank/ Financial Institution with maximum amount of Rs.15 lakh. Area Outside Municipal Corporation limit: Subsidy @ 15% of term loan amount disbursed by the bank/ Financial Institution maximum amount of Rs.25 lakhs.
- Credit guarantee fund : Collateral-free loans are provided to the MSMEs. Further, Small Industries Development Bank of India (SIDBI) provides financial aid to the MSMEs through Pradhan Mantri MUDRA (Micro Units Development and Refinance Agency) Yojana.
- Subsidy on Patent registration : Enterprises that have MSME Registration Certificate can avail 50% subsidy for patent registration by making application to respective ministry.
- Protection against delayed payments : The Ministry of Micro, Small and Medium Enterprises gives protection to MSME Registered Business against delay in payments from Buyers and right of interest on delayed payment through conciliation and arbitration and settlement of dispute be done in minimum time
- Reimbursement of ISO certification charges : Enterprises that have MSME Registration Certificate can claim reimbursement of ISO Certification expenses by making application to respective authority.
- Other benefits and schemes
Data Source : https://msme.gov.in/