According to Atma Nirbhar Bharat Abhiyan, a new definition of MSME
The Indian government promised significant relief for MSMEs on May 13, 2020. The fact that the government revised the definition of the MSMe as a whole is another key source of relief.
The new definitions have eliminated the gap between manufacturing and service businesses. Additionally, a new turnover condition has been added, and investments have been revised upward.
Also Read: Print MSME Registration Certificate
What does MSME mean in its new and revised form?
The following is the updated definition of MSMe:
Micro Enterprises: Micro businesses are those in the manufacturing and service sectors with capital expenditures up to Rs 1 crore and annual sales up to Rs 5 crore.
Small Enterprises: For small firms, the minimum investment and revenue criteria have been raised to Rs. 10 crore and Rs. 50 crore, respectively.
Medium Enterprises: Medium-sized businesses are those with an investment of up to 20 crore rupees and a revenue of up to 100 crore rupees.
Benefits from SSI or MSME Registration
The Indian government offers numerous advantages to small-scale businesses, often known as medium-sized, small, and micro enterprises (MSME). Any entity must register as an MSME/SSI enterprise under the MSMED Act in order to be eligible to receive the benefits listed below. Limited liability partnerships (LLPs), proprietorship firms, partnerships, private limited companies. And other business structures may also register under the MSMED Act.
The advantages of SSI/MSME registration in India are listed below.
- Banks’ Collateral-Free Loans
The Government of India launched the loans Guarantee Fund Scheme for Micro and Small Enterprises to make collateral-free loans available to the micro- and small-enterprise sector. Both established and startup companies are eligible to apply to have their operations covered by the initiative. The Ministry of Micro, Small, and Medium Enterprises created the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). The Indian Government and Small Industries Development Bank of India (SIDBI) is in charge of putting the Credit Guarantee Fund Scheme for Micro and Small Enterprises into action.
- A substantial 50% discount on patent registration
Businesses with an MSME Registration Certificate may apply to the appropriate government for a 50% subsidy for patent registration.
- Exemption from the overdraft interest rate of 1%
According to the plan, companies with MSME Registration are qualified for a 1% interest rate discount on OD.
- Eligible for a subsidy for industrial promotion
Businesses that have registered as MSMEs are qualified for industrial promotion subsidies, as the government may define.
- Protection from sluggish payments
The Ministry of Micro, Small, and Medium Enterprises provides protection to MSME Registered Businesses against a delay in payments from Buyers. And a right of interest on delayed payment through mediation and arbitration and requires that dispute resolution take place in a short amount of time. The buyer is required to complete payment by or earlier. The date agreed upon between the buyer and the micro or small firm if it supplies any goods or services and has MSME registration.
If there is no payment due date specified in the agreement. The buyer must make payment within fifteen days of receiving the goods or services. A payment that is due to a micro or small business cannot, under any circumstances, take more than 45 days to arrive from the time it was accepted or deemed accepted. If the buyer doesn’t pay on time. The provider will charge compound interest with monthly interest based on the amount from the agreed date of payment or fifteen days after the buyer accepts the product or service. The penal interest for late payments to an MSME business is three times the bank rate, according to a statement from the Reserve Bank of India.
- Reduction in electricity costs
By submitting an application to the electrical department with their MSME Registration Certificate. Businesses that have received this certification are eligible to receive a discount on their electricity bills.
- Compensation for ISO Certification Fees
Businesses with MSME Registration Certificates can apply to the appropriate authority for reimbursement of ISO Certification costs.
- Scheme for Excise Exemption
According to the government’s Excise Exemption policy and based on economic activity. Businesses with MSME Registration are eligible for Excise Exemption in the first year of operation.
- Licences, approvals, and registrations are quite simple to obtain
The possibility to submit with an MSME Registration Certificate in hand. An application has made it very simple for businesses who have an MSME Certificate to get licences, licences. And registrations on any subject for their company from the appropriate authorities.
- Under direct tax laws, exemption
Companies with MSME registrations may be qualified for a first-year direct tax exemption under the government’s plan and based on the type of business.