Micro, Small and Medium Enterprises (MSME) contribute nearly 8 percent of the country’s GDP, 45 percent of the manufacturing output and 40 percent of the exports. They provide the largest share of employment after agriculture. They are the nurseries for entrepreneurship and innovation. They are widely dispersed across the country and produce a diverse range of products and services to meet the needs of the local markets, the global market and the national and international value chains.
Small Scale and ancillary units (i.e. undertaking with investment in plant and machinery of less than Rs. 10 million) should seek registration with the Director of Industries of the concerned State Government.
The following slabs have been prescribed under the MSME Act to determine the status of the Enterprise:
- 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.
The main purpose of Registration is to maintain statistics and maintain a roll of such units for the purposes of providing incentives and support services. States have generally adopted the uniform registration procedures as per the guidelines. However, there may be some modifications done by States.
When you register a Micro, Small and Medium Enterprise, you will get an MSME certificate (provisional or permanent).
Advantage of MSME Registration:
- Easy finance availability from Banks, without collateral requirement under CGTMSE scheme.
- Bar Code registration subsidy.
- Protection against delay in payment from Buyers and right of interest on delayed payment.
- Preference in procuring Government tenders.
- Stamp duty and Octroi benefits, Up to 80-90% refund of Octroi.
- Concession in electricity bills.
- Reservation policies to manufacturing / production sector enterprises.
- Time-bound resolution of disputes with Buyers through conciliation and arbitration.
- Reimbursement of ISO Certification Expenses.
- Credit prescription (Priority sector lending), differential rates of interest etc.
- Excise Exemption Scheme.
- Exemption under Direct Tax Laws.
- Statutory support such as reservation and the Interest on Delayed Payments Act.
- Subsidy on NSIC performance and Credit ratings.
- Participation in Govt. Purchase registrations.
- Registration with NSIC.
- Counter Guarantee from Govt. of India through CGSTI.
- Waiver in Earnest Money (Security Deposit) in Govt. tenders.
- Special consideration in International Trade Fairs/ Exhibitions for MSME unit.
