Micro-Small & Medium Enterprises (MSMEs) have a major contribution in the socio-economic development of India. MSME registration for both manufacturing and service enterprises is highly important since it allows SMEs to avail benefits from various government initiated schemes.
Changed Definitions of MSMEs
In October 2019, Union Minister Nitin Gadkari revised the definition of micro, small, and medium enterprises to grant a unified description for everything related to taxation, investment, etc. This was implemented to refine the operational scenarios for Indian enterprises. It led to change of the classification criterion for MSMEs to investment in plant and machinery.
On 13th May 2020, Finance Minister Nirmala Sitharaman added the additional criterion of turnover along with the investment. This definition was announced under the Atmanirbhar Bharat Abhiyaan to faciliate MSMEs to grow in size and help them deal with the difficulties levied upon by the pandemic.
As per this, there won’t be any distinction between manufacturing and services sector MSMEs, and will cover:
– Micro units with investment up to ₹1 crore and turnover up to ₹5 crore
– Small units with investment up to ₹10 crore and turnover up to ₹50 crore
– Medium units with investment up to ₹20 crore and turnover up to ₹100 crore
The definition, however, further got revised on June 1, 2020 on representations that the revision is still not in tune with the market and pricing conditions, and should be further revised upwards. As per the revised definition, it will be ₹50 crore of investment and ₹250 crore of turnover.
This step will help attract investments and create more jobs in the MSME sector. The following table provides the details of revised limits:
|Category||Old Capital||Old Turnover||New Capital||New Turnover|
|Micro||₹25 Lakh||₹10 Lakh||₹1 Crore||₹5 Crore|
|Small||₹5 Crore||₹2 Crore||₹10 Crore||₹50 Crore|
|Medium||₹10 Crore||₹5 Crore||₹50 Crore||₹250 Crore|
Documents Required for MSME Certificate
- Aadhaar card
- Rent agreement
- Property paper
- Cancelled Cheque
- Company Registration i.e., Sale or Purchase Bill and PAN card
- Business Address Proof
For self-owned property Lease deed, property tax receipt, possession letter, allotment letter
For rented property: NOC from the landlord, rent receipts, utility bills or document evidencing the landlord’s ownership.
- Copies of Sale and Purchase Bills
- Partnership Deed
- Memorandum of Association (MoA)
- Articles of Association (AoA)
- Copies of Licenses and Bills of Machinery Purchased
Charges for MSME Certificate
MSME certificate can be obtained for an all-inclusive cost of ₹1999 per certificate. This can be paid via secured online gateways.
How to register as an MSME?
MSMEs can register simply by visiting https://msme.gov.in/online-application and filling the application form. Once the registration process is complete, applicants can get MSME certificate within 5 working days. This certificate does not expire and is relevant for both manufacturing and service sector enterprises.
Benefits of MSME Certificate
- It is helpful in bidding for and obtaining government tenders
- An MSME certificate gets 15% import subsidy on loans for fully automatic machinery
- It becomes easy to get licenses, approvals and registrations for any SME
- An MSME with the registration certificate can get the ISO certificate expenditure reimbursed
- It helps in getting low interest rates
- Registered MSMEs gets tariff and tax & capital subsidies, as well as exemption under Direct Tax Laws
What is Udyog Aadhar?
Udyog Aadhar was launched to simplify the process of registration for the business owners as MSMEs. It is a government registration provided with a recognition certificate and a unique number to certify micro, small and medium enterprises.
Benefits of Udyog Aadhar
- Collateral free bank loan up to 1 crore
- Preference in procuring government tenders
- 1% exemption on interest rate on bank overdraft
- Reduced interest rates on loans
- Subsidised electricity bills
- Protection against the delay in payment from buyers
- Tax rebates
- 50% discount on government fees for trademark and patent
- Speedy resolution of disputes
- Octroi benefits
- Businesses can claim stamp duty and registration charges
- Subsidy from NSIC and credit ratings
- Offers eligibility for IPS subsidy
- Reservation of products for exclusive manufacturing by MSME and SSI
- Business can avail Excise Exemption Scheme
- Enjoy easy bank mortgage
- Businesses can become a part of International business fairs
- States and Union territories have their package of facilities and incentives for small scale which can be availed