Micro, Small and Medium Enterprises Development (MSMED) Act was enacted in the year 2006 for the benefit and promotion of small business in India. The MSME sector is the largest contributor to the GDP of our country. Both the manufacturer and provider of services are covered under the MSME sector. Anyone can start their own business by registering under MSME with least documentation and legal formalities and avail various benefits envisaged under the MSMED Act.
Definition of MSME-
Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:
- A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh;
- A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore;
- A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.
Enterprises engaged in providing or rendering of services and whose investment in equipment (original cost excluding land and building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006 are specified below.
- A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10 lakh;
- A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore;
- A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.
MSME Registration Benefits
- Protection against delay in payment from Buyers and right of interest on delayed payment
- Preference in procuring Government tenders,
- Concession in electricity, water bills
- Reservation policies to manufacturing / production sector enterprises- The government reserves certain products to be exclusively manufactured by MSMEs.
- Time-bound resolution of disputes with Buyers through conciliation and arbitration
- Credit Guarantee Fund Trust For Micro and Small Enterprises (CGTMSE) – Under this scheme, banks offer finance of up to Rs. 100 lakh to MSMEs without any collateral security and/or third-party guarantee. Each bank has separate targets for financing of MSMEs under this scheme.
- Excise Exemption Scheme
- Exemption under Direct Tax Laws.
- Subsidy on ISO Certifications
- Registration with NSIC.
- Counter Guarantee from the government through CGSTI.
- Waiver in Earnest Money (Security Deposit ) in Government tenders
- 15% weight age in price Preference.
- Reduction in rate of Interest from banks- Small and medium enterprises get loans at rates lesser than the market rates, especially those in agriculture and located in rural areas.
Documents Required For MSME Registration
- PAN Card of the Proprietor
- Aadhar Card of the Proprietor
- Electricity Bill of the palce of doing business
- Rent Agreement (in case of rented premises)
Time Period: 1-2 Working days
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