What is MSME/SSI Registration ?
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 online helps businesses avail multiple government subsidies and benefits MSMED act, MSME gov.
Micro, Small and Medium sized enterprises in both the manufacturing and service sector can obtain MSME Registration or SSI/Small Scale Industry Registration under the MSMED act, MSME gov. Although getting MSME online 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.
One can also registered their MSME at the govt. website: https://udyogaadhaar.gov.in. For this, Aadhar validation is must via a OTP on mobile of the entrepreneur.
There are small and medium enterprises which fall under SSI/MSME category. Being the backbone of an economy sector, MSME enterprises acts as an engine which helps in the growth of the economy and promoting equitable development. Therefore, to support and promote MSMEs, the Government of India through various subsidies, schemes and incentives promote MSMEs through the MSMED Act. To utilize all the benefits which are offered under MSME act, the enterprise should be registered as MSME with the concerned department.
These benefits of MSME registration include priority sector lending, power tariff subsidies, capital investment subsidies and excise and direct tax exemptions. Following are the conditions which need to be fulfilled to qualify under MSME Act.
- All the manufacturing enterprises which have invested less than 10 crores in machinery and plant are allowed to be registered as MSME.
- In service enterprises, the investment in plant and machinery should not be more than 5 crores.
- And in near future, if your enterprise exceeds the maximum limit, then it will not sum up as MSME.
What Are The Different Types of MSMEs?
There are 3 types of MSME or SSIs which can be classified as under:
Micro Enterprises
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.
Small Enterprises
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.
Medium Enterprises
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 ?
There are multiple benefits of MSME / SSI registration for small businesses:
- 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.
- Tax rebates : MSME / SSI registered businesses enjoy multiple income taxes and capital gains tax subsidies from the government.
- Cheaper infrastructure : 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.