MSME stands for Micro, Small and Medium Enterprise. MSME or SSI enterprises are the foundation of any economy and are an engine of economic growth, advancing impartial improvement for all. MSME registration or SSI registration helps businesses avail multiple government subsidies and benefits MSMED act.
Micro, Small and Medium sized enterprises in both the manufacturing and service sector can obtain MSME Registration or SSI registration under the MSMED Act. Although getting MSME registration is not mandatory but it is always suggested to small and medium enterprises to get it done it provides a variety of benefits. Benefits such as rate of interest charged would be very less, tax subsidies, capital investment subsidies and much other support from the government sector.
WHAT ARE THE DIFFERENT TYPES OF MSMES?
There are 3 types of MSME or SSIs which can be classified as under:
Micro-enterprises are the smallest entities, of course. The investment under Micro manufacturing enterprises should be less than Rs. 25 lakhs in plant and machinery, whereas, the micro service enterprises should not exceed Rs. 10 lakhs investment.
In small manufacturing enterprises, the investment should be in between Rs. 25 lakh and Rs. 5 crores in plant and machinery, while in small service enterprises this investment limits between Rs. 10 lakh and Rs. 2 crores.
And if we’ll talk about the Medium manufacturing enterprises, then the investment should be in between Rs. 5 crore and Rs. 10 crores in plant and machinery, and for small service enterprises it should be in between Rs. 2 crore and Rs. 5 crores.
BENEFITS OF MSME / SSI REGISTRATION
Cheaper bank loans:
The rate of interest on loan offered to MSMEs is 1-1.5% lower compared to typical business loan interest.
Easy access to credit:
PM Modi has introduced the Mudhra Loan scheme, which provides loans to MSME / SSI without collaterals.
Quicker approvals from state and central government bodies: Business registered under MSME are given higher preference in terms of government license and certification.
MSME / SSI registered businesses enjoy multiple income taxes and capital gains tax subsidies from the government.
Charges are lower for MSME registered company for facilities such as electricity and VAT exemptions. In fact, other business services such as patents are also cheaper for MSMEs.
Access to tenders:
There are multiple government tenders which are open only to MSMEs to promote small business participation in the India.
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