Everything You Need to Know About MSME Registration for Your Business
The entrepreneurs are in for some new opportunities in exchange for a few compliances. It won’t be that difficult for the sake of the achievements you are after. For any new business adventure, you need to be thoroughly informed about the new government mandate for MSME registration.
What is MSME?
MSME stands for micro, small and medium enterprises and any enterprise that falls under any of the three categories as mentioned in the MSMED Act. The act is going to play a pivotal role in economic development, promoting equity and growth.
The earlier classification was based on the amount of investment and the machinery/equipment used by the enterprise.
The earlier investment criteria are laid down below:
|Manufacturing||Up to Rs. 25 Lakhs||Up to Rs. 5 crores||Up to Rs. 10 crores|
|Services||Up to Rs. 10 Lakhs||Up to Rs. 2 crores||Up to Rs. 5 crores|
The low investment criteria often served as an obstacle to growth, which prompted the necessary revision of the MSME classification. This revision was the Government’s response under Aatmanirbhar Bharat Abhiyan. The present classification now has brought the annual turnover and investment under the umbrella of MSME.
The following is the summary of the revised criteria:
|Classification Criteria||Annual Turnover||Investment|
|Micro||Less than Rs. 5 crores||Less than Rs. 1 crore|
|Small||Less than Rs. 50 crores||Less than Rs. 10 crores|
|Medium||Less than Rs. 250 crores||Less than Rs. 50 crores|
Why Apply for MSME Registration?
The MSME registration is at the sole discretion of the Entrepreneur. But most businessmen apply and obtain the registration to avail the benefits of protections under the MSMED Act of the Government of India.
We have listed some of the important benefits of MSME registration below. If you are an MSME certificate holder, then you can:
- Enjoy easy sanction of bank loans with lower interest rates by a huge margin. The interests can be as low as 1% with friendly EMI opportunities.
- Avail the benefit from tax exemption under certain circumstances.
- Enjoy MAT (Minimum Alternate Tax) extension of 15 years as opposed to the regular MAT which is 10 years.
- Get priority on applications of licenses and certificates issued by the Government of India.
- Avail of various concessions on patents and the costs of setting up the industry.
- Easily access credit for your businesses.
- Gain preference for government tenders on the Udyam Registration Portal. (MSME is integrated with Government e-Marketplace and other portals so you can easily access the marketplaces and e-tenders.)
- Enjoy the provision of a Time Settlement Fee for delayed or non-paid amounts of MSME.
The State Government and Union Territories too have issued their own package of facilities for the MSMEs. Some of them are listed below:
- Development of specialized industrial estates
- Tax subsidies
- power tariff subsidies
- Capital investment subsidies
Steps for registration
The registration process is fully online and free. Visit https://udyamregistration.gov.in/ for registration online. If you are to register with the PAN card then :
- Click on the “For New Entrepreneurs who are not Registered yet as MSME” on the page.
- Enter your name and Aadhar number on the MSME registration page.
- An OTP will be generated. Validate as per norms.
- The portal will fetch the details from the government database if you already have a PAN card. In the meantime, fill in ITR details.
- Validation of PAN is the next step. When it is done, move on to fill in the details of your plant/industry.
- When you have entered all the details, submit them. A final OTP will be generated. Validate the OTP.
- After this step, the registration process is complete. You will get a reference number. Save the number for later use. The verification process may take a few days before you receive the Udyam Registration Certificate.
Registration without PAN Card is the same, except that you have to click at ‘No’ when asked ‘Do you have a PAN?’. You can then move on to filling in the necessary details. But you have to update your PAN and GSTIN on the portal to avoid Udyam registration cancellation.
The portal has suggested that only the Aadhar Number is enough for the registration. But the enterprise will have to submit :
- Business address proof
- Purchase bill and sales bill copies
- Partnership deed/Memorandum of Association/Articles of Association
- Photocopies of bills and licenses of machinery bought for use
The Validity of MSME Registration
The MSME registration certificate is valid as long as the business is operational. However, the registration is subject to suspension if the set criteria are not met.