In a growing country like India, the Micro, Small, and Medium Enterprise (MSME) sector plays a critical role in economic progress. This industry was created with the goal of fostering micro, small, and medium-sized businesses in India. The MSME industry in India also contributes significantly to manufacturing, exports, employment, and industrial units. In short, India’s economic growth is also dependent on the expansion of the MSME sector. In India, the MSME sector is also known as the Small Scale Industry (SSI).
Also, Read- udyam registration benefits in hindi
Changes in the Definition of a Small Business:
According to the Ministry of Corporate Affairs, the definition of a small business will change as a result of Finance Minister Nirmala Sitharaman’s suggestion in the Union Budget 2021. In the plan, paid-up capital was increased to 2 crores, while turnover was increased to 20 crores. It is set to take effect on April 1st, 2021.
In India, there are two types of MSME, each of which is defined by the amount of money invested in machinery and plant by the company. The following are the two categories:
This group includes micro-enterprises with annual revenues of less than INR 25 lakh, small businesses with annual revenues of less than INR 5 crore, and medium businesses with annual revenues of less than INR 10 crore.
Microbusinesses with revenues of less than INR 10 lakh, small businesses with revenues of less than INR 2 crores, and medium businesses with revenues of less than INR 5 crore are all considered service businesses in the MSME sector.
Under the MSME Act, both types of businesses can register as MSMEs.
The Benefits of MSME Registration for Indian Businesses:
- In comparison to ordinary loans, businesses can get cheaper bank loans with lower interest rates (about 1 to 1.5 percent).
- There are tax rebates available.
- Unlike the standard Minimum Alternate Tax (MAT) credit period of ten years, MSMEs are permitted to extend the MAT credit period to fifteen years.
- Special government tenders are aimed mostly at SMEs.
- Access to credit is simple. Due to specific tax refunds and other incentives, the cost of setting up an industry, obtaining patents, and so on is low.
- In terms of licensing and certification, the government has a strong preference.
MSME Registration in India Requires the Submission of the Following Documents:
The following are the main documents that must be submitted in order to register an MSME:
- Proof of Address (of Business)
- Rental Property: A letter of authorization from the landlord, a rent receipt, and a utility bill or equivalent are required as confirmation of the landlord’s ownership.
- Self-owned Office: Allotment letter, possession letter, property tax receipt, or lease deed are required for self-owned offices. There is no requirement for a possession document if a municipal license exists against the business name or its proprietor, director, or partner.
- Every sale and purchase bill must have receipts/copies.
- Bills of sale for machinery, as well as copies of necessary licenses.
- Articles of Association (AoA) and Memorandum of Association (MoA)/Partnership Deed, as well as a copy of the board resolution and the certificate of incorporation.
In India, the procedure for registering a small business is as follows:
It is strongly advised that you seek the advice of an expert while applying for an MSME. When registering as an MSME under the MSME Act, however, the following details should be kept in mind.
- When registering for the MSME program, business owners must fill out the MSME form online via www.udyamregister.org.
- Anyone can register for more than one industry under the MSME program.
- During MSME registration, business owners must precisely fill out personal information such as name, Aadhar, industry name, PAN, mobile number, and bank account information.
- Individuals can also provide self-attested certificates in support of their claims.
- The MSME application correctly uploads one of the essential details and papers; they will receive the business’s registration number.
MSME in India: Government Schemes:
The Indian government has launched a number of MSME programs for small enterprises, including:
Scheme for Zero Defects:
To be a member of this scheme, MSMEs must manufacture the export category goods according to the stipulated requirements. Such criteria ensure that export items are accepted in foreign countries. Entities that participate in this plan are also eligible for a variety of tax breaks and discounts on their export goods.
Memorandum Scheme for Udyog Aadhaar:
To be a part of this scheme, MSMEs must have an Aadhaar number in order to take advantage of the readily available loans, credit, and government incentives.
Scheme for Incubation:
The government promotes and encourages creative MSMEs to come up with new ideas, designs, and products, as well as to launch them on the market, through this program. Approximately 75 percent to 80 percent of the costs of innovative initiatives developed by MSMEs are managed by the government.
Standards for Quality Management and Quality Technology:
Enrollment in this program enables MSMEs to maintain required quality standards while adopting new technology. The government uses this scheme to hold a series of seminars and expert sessions with new MSMEs to raise awareness of new technology accessible on the market.
Scheme for the Grievance Monitoring System:
MSMEs who are registered under this plan can file complaints with the government regarding their businesses, as well as check the progress of their complaints and keep them open if the results are not satisfactory.