What is MSME Registration?
Small scale industries play a vital role in the socio-economic development of India. To promote and encourage these small-scale industries, the government of the country created the MSMED Act. The Act was created to maintain a list of all the industries registered as MSME or SSI. The record aided in providing support and incentives to these firms. Furthermore, SSI helped in employment of people at little capital investments. All these entities should possess certificate of MSME registration, which should be registered with the Central Government’s MSME department under the Act of MSME Development- 2006
The MSMED Act includes:
- Small Scale Industries (SSI)
- Micro, Small and Medium Enterprises (MSME)
- Different sectors have different limits for registering under the act.
- A manufacturing enterprise with plants and machinery that required an investment of below 10 Crores can be an MSME.
- For service enterprises, the amount caps at five crores.
- If the company exceeds the upper limit, at any point in the future, it is not considered as an MSME.
To avail the numerous benefits from the Government of India, an SSI registration certificate is needed. It is an optional registration but the companies that get registered are eligible for:
- Lesser interest rates
- Excise exemption scheme
- Subsidies in tax, capital investment and power tariff
- Other support
New Udyog Aadhaar replaces MSME Registration
In order to make the process of registering a small or medium level enterprise even more straightforward, a new act called the Udyog Aadhaar was created in 2015. Udyog Aadhaar completely replaces MSME and is conducted entirely online. Under the Udyog Aadhaar, only one page needs to be filled for registration with Aadhaar Card acting as the sole legal document.
Following are the MSME schemes offered by the government Udyog Aadhaar
Udyog Aadhaar Memorandum (UAM) was introduced under the MSMED Act, 2006 to promote the ease of doing business for MSMEs. A simple one-page form is filed and the registration is user-friendly and easy. No documentation is required, except the 12-digit Aadhaar card number. Businesses also have a provision to file more than one Udyog Aadhaar with the same Aadhaar number. UAM can be filed on a self-declaration basis.
ZED scheme encourages manufacturers to manufacture goods for export that are of highest quality. If the standards are met and goods are exported, the exporters will be eligible for rebates and concessions. If they are not exporterd, the goods will be rejected and returned to India.
This scheme is aimed at helping micro, small and medium entreprises produce quality products at competitive prices by adopting the tools. Through the tools, businesses will be able to optimize the resource, improve quality, reduce rejection and rework. Under this scheme, businesses will be sensitized about the tools through activities like workshops, campaigns and seminars.
Under this scheme, the complaints and issues of the businesses will be addressed. The business owners can also track the status of their complaint and open it again it they are dissatisfied with the outcomes.
Why Udyog Aadhaar registration?
In the banking sector, if you need to avail the benefits of the MSMED Act of 2006, you will have to opt for MSME registration.
When you register your firm with Udyog Aadhaar , the business can leverage many schemes initiated by State and Central Government. In addition to this, for availing the MSMED Act 2006 benefits in the banking sector, MSME registration becomes mandatory.
- Refrain from asking for security deposits
- Concession in the electricity bills
- Increased chances of winning government tenders
- Easy and cheaper bank loans
- Reservation benefits
- Stamp duty and registration charges are waived off
- Reimbursement under the bar code registration
- Industrial promotion subsidy
- Reduction in the rate of the interest by major banks