MSMEs are the backbone of the Indian economy, generating millions of jobs each year and significantly aiding in its growth.
Also Read: Print Udyog Aadhar Certificate
These are three motivating details concerning MSMEs in India:
- 16 crore Indians would have jobs thanks to MSMEs and small companies by 2023.
- MSMEs produce 30 percent of India’s GDP.
- MSMEs are responsible for 40% of India’s exports.
This demonstrates unequivocally that small firms and organisations located all over India have enormous potential and a bright, exciting future. Unregistered small business operations represent a significant loss of commercial and financial assistance. In India, MSME Udyam registration is advantageous and necessary for a variety of tax and legal reasons.
We will demonstrate the complete online MSME Udyam registration procedure, discuss the advantages of MSME registration, and discuss MSME Udyam registration costs.
But first, let’s examine the definition of MSME.
MSME definition – Describe MSME.
Micro-Small & Medium Business refers to a small business that has been registered with the Ministry of Micro, Small, and Medium Businesses (MSME). It belongs to the categories of manufacturing and service businesses.
- A microenterprise is a business with a capital investment and revenue under Rs. 1 crore.
- A small firm is one with an investment of less than 10 crore rupees and sales of under 50 crore rupees.
- A business is categorised as a medium enterprise if it invests less than Rs 20 crore and generates less than Rs 100 crore in revenue.
Advantages of Indian MSME Udyam Registration
Several often updated and published government programmes, benefits, and subsidies are not available to unregistered MSMEs.
Ten advantages of MSME Udyam registration in India are listed below:
Collateral-free Loans Available
Bank loans for registered MSMEs are available without any security or collateral. There are certain small business and MSME lending programmes that don’t demand collateral, albeit not all MSMEs loans are.
For instance, if the requirements are satisfied, the Credit Guarantee Trust Fund Program offers speedy bank loans without any security.
50% discount on patent applications
For the idea and process of their firm to be registered as a patent, registered MSMEs are entitled for up to a 50% incentive. To participate in this government initiative, you must have a certificate of MSME registration.
Free of Overdraft Interest Charges
If they have an overdraft, registered MSMEs can receive a 1% discount on the interest they pay at any bank or financial institution.
Qualifying for Industrial Promotion Subsidy
Under numerous government programmes and programmes, registered MSMEs can receive industrial promotion subsidies for spreading awareness of their firm around the world.
The idea and process of a registered MSMEs can receive up to a 50% incentive to be registered as a patent.
A defense against late payments
When a registered MSME provides goods or services to another business and the payment isn’t made within 45 days, the government gives MSMEs the power to levy compound interest on the unpaid balance each month. Also, the required interest rate is three times the RBI-authorized rate.
The only MSMEs in India who are qualified for this assistance with delayed payments are those with formal recognition.
Electricity Bill Subsidies
Refunds on electricity bills are occasionally available to registered MSMEs, particularly for manufacturing companies.
ISO Certification is Free
The Indian government pledges to cover all ISO registration fees in the event that a registered MSME gets ISO certification.
Non-registered MSMEs are not eligible for this reimbursement.
Additional Tax Advantages
Only registered MSMEs are eligible for the maximum 15-year extension of the minimum alternate tax (MAT) credit, as opposed to the standard 10-year extension granted to all other enterprises.
Gaining More Government Tenders
The Udyam Registration Portal is closely linked to a number of government e-marketplaces and State Government websites for issuing tenders, giving registered MSMEs additional assistance and a benefit in gaining government contracts.
In this sense, registered MSMEs have a significant edge over unregistered MSMEs.
Costs for One-Time Settlement of Non-Payments
The government offers a one-time settlement fee to cover any outstanding debts if a registered MSME is unable to pay any outstanding invoices.