WHAT IS MSME
MSME refers to the Micro, Small and Medium Enterprise. These enterprises plays a vital role in the economy of India. It is because these industries serves as the raw material producer for the large scale industries. They also produce those products which are not produced by the large scale industries. These industries also acts as a job provider in rural and backward areas where large scale industries does not operate. They are easy to establish in backward areas due to their low establishment and maintenance costs.
Although, online registration for these industries is not compulsory. But it is always recommended to them to get the registration done, to avail various benefits offered by the government. These benefits include less rate of tax, low electricity charges, subsidies in other resources, etc.
Benefits of registering business under Micro, Small,Medium Enterprise Act (MSME)
MSME registration is very important, as it enables these enterprises in availing benefits from various government initiated schemes.
- Lower rate of Interest: MSME registration helps in getting low interest rates bank loan as compared to the interest rate charged on loans to large scale industries .
- Easy access to credit: Registered MSME’s loans come with great benefits for small businesses, like no collateral, fast processing cycle and online account access, that meet the exact needs of small businesses at any stage of their growth. This is the initiative by the central government to advantage these enterprises and encourage development of it.
- Fast approvals: MSME registered units get higher preferences by the government as they are beneficial for them. These enterprises are given approvals to be set up faster than any other industry.
- Tax rebates: There are various tax rebates, capital subsidies offered to Registered MSMEs by government which is helpful for the business owners.
- Grants for infrastructure development: This is another advantage given that Registered MSME’s get land, electricity, water and other resources at cheaper rates or on subsidized rates.
- Protection against Payments (Delayed Payments) – The buyer has to make payment to MSME seller within 45 days which means If the buyer delays the payment for more than 45 days after accepting the products or services then the buyer has to pay compound interest on the amount that was agreed to be paid. The interest rate is three times the rate that is notified by the Reserve Bank of India.
- Easy access to Government tenders: MSME registered enterprises have opportunities to apply for government tenders.
- Market assistance from the government and Export Promotion: The Government of India conduct internationally several exchange programs, craft fairs, exhibitions, and trade-related events. Being categorized as a micro, small or medium enterprise gives access to all of these platforms for international cooperation on trade-related aspects with different countries and support new business connections. The government also incentivizes the export of goods and services by MSMEs by way of subsidies, tax exemption, and technical support.
HOW MSME HELPS IN SAVING GOVERNMENT FEES
- Subsidy on patent registration (50%) – A hefty 50% subsidy is given to the Enterprise that has the certificate of MSME Registration. This subsidy can be availed for patent registration by giving application to respective ministry.
- Benefit in Trademark registration (50%)- The registered MSME enterprises can avail rebate of 50% on Government Fees for Trademark Registration Application. The rebate can be claimed based on MSME Certificate for Companies, LLP, Partnership Firm, etc. which has fees of Rs.9000/-.
- Low-cost ISO certification- The registered MSME enterprises can claim the reimbursement of the expenses incurred for the ISO certification.
- Reimbursement of Bar code registration fees (100%) – Ministry reimburses 100% registration fees for bar coding in order to encourage MSEs to use bar-codes.
We hope this article helps all of those who might had any confusion related to the benefits of MSME registration in India and also to those who are willing to come into an entrepreneur role or are having a Micro, Small to Medium scale business. MSME’s are rapidly growing with regular support from the government.
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