MSME registration is a government- oriented scheme to be availed by micro, small and medium-sized enterprises. These entities are accountable for the economic growth of the company. In simple terms, the economic growth of the company and MSMEs growth are inter-related.
The MSME registration can be done on the online portal known as “Udyam registration”. Here, in this blog, we will make you become accustomed to the advantages of an MSME/SSI Registration. This includes tangible as well as intangibles benefits to trade and entrepreneurial growth.
Key Benefits of an MSME/SSI Registration
Below are the key advantages of MSME/SSI Registration. Those are as follows:-
Collateral Free loans from banks
In the absence of collateral security, many MSME/SSI Registration companies may find it enormously difficult to secure a loan for starting a new industry. The credit Guarantee scheme, aka CGS, was launched by the Indian Government to help SSI to avail credit from banks without any collateral. The scheme encompasses existing as well as new companies. The Indian Government in collaboration with the Ministry of MSME launched a Trust called Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to deploy funding schemes for Micro and Small Enterprises.
50% subsidy on Patent registration
Enterprises under MSME registration are eligible to avail fifty percent of subsidy related to registration filing an application to concerned ministry.
1% exemption on the rate of interest on overdraft
Enterprises having MSME/SSI Registration can avail a one percent exemption on the rate of interest on overdraft as per the scheme.
Subsidy on Industrial Promotion
Enterprises under MSME/SSI Registration can avail the Industrial Promotion Subsidy as prescribed by the Indian Government.
Protection against delayed payments
The Ministry of Micro, Small, and Medium Enterprises safeguards the MSME oriented entities against the unexpected delay in payments from buyers. It also protects the right of interest on payment delay via arbitration of the dispute in a minimal timeline.
If any MSME registered company engaged in supplies of goods or services then they have to disburse the payment on or before the date agreed upon between the parties. In case if the agreement doesn’t enclose a payment date, then the buyer needs to make payment in the time span of 15 days from the date of the acceptance of services or goods.
Moreover, in any case, a payment due to the MSME register entity cannot be 45 days from the date of the acceptance of services or goods. In case of payment failure, the buyer is liable to bear the compound interest as well as a monthly interest applicable to the due amount. The penal interest amount on the due payment is 3 times of the bank rate as per the notification of RBI.
Read our article:Can Startups Benefit From MSME Registration For Better Govt Support?
Concession in the Electricity Bills
Enterprises under MSME/SSI Registration need not bear an electrical bill to its exact value as the government offers a scheme under which such expenses have been waived off to a certain limit.
Reimbursement of ISO Certification charges
Enterprises under MSME/SSI Registration certificate can avert unnecessary expenses related to the ISO certification by filing an application to the concerned authority.
Exclusive purchases under MSME Market Development Assistance Scheme
MSME Market Development Assistance Scheme consolidates 358 items that are exclusively available to small scale industries and medium enterprises registered under the MSME scheme.
Technology Support to MSMEs
The government has a special reimbursement scheme for MSME registered entities willing to promote clean energy and improve cost-effectiveness. Moreover, the government also provides adequate backing to ensure the seamless implementation of clean energy and preparation of audit reports by reimbursing the expenditure related to it.
Permission for Infrastructure Growth
Since MSMEs generate a considerable amount of employment irrespective of the nature of the sector, the government also tries to pinpoint training sectors for MSME and provide financial aid for improving the infrastructure for entrepreneurial growth.
Access to Global Trading Platforms
The Indian Government arranges several craft fairs, exchange programs, trade-oriented events, and exhibitions globally. Companies under MSME registration have access to these platforms that eventually let them foster countless national and international business connections. Moreover, the government has also waived off significant expenditures related to the export of goods through deploying subsidies and technical support.
Exemption on Excise duty
Enterprises under MSME/SSI Registration need not pay excise duty in the initial phase of the business as per the guideline of the Excise Exemption scheme drafted by the government and based on business activity.
Access to Government Tender
Enterprises under MSME certification have access to several government tenders. MSME based entities get special treatment from the government in this context.
Subsidy on bar code registration
Enterprises under MSME Registration are eligible for Bar Code Registration subsidy as provided in the scheme.
Relaxation in Security Deposit
The ministry of MSME in collaboration of Indian government offers given relaxations to companies under MSME registration while filing an application for government-oriented tenders:-
- No charges adhere to the issuance of tender
- No need to pay out the earnest money
- Waiver of security deposit up to a certain limit specified under the scheme.
Relaxation on NSIC Performance and Credit ratings
Enterprises that secured by MSME registration can avail of the prescribed relaxations on NSIC Performance and Credit ratings. The interest rate for companies under MSME registration is significantly lower than other companies.
Certain targets are set for banks’ lending to the Micro and Small Enterprises. The banks’ have to achieve a 20% growth in credit to micro and small enterprises and 10% annual growth in the number of micro-enterprises accounts and 60% of total lending to the Micro and Small Enterprises sector.
Well, the MSME registration process provides both tangible and intangible advantages to the enterprises willing to work under the same. MSME registration helps the enterprises to withstand rapidly evolving competition and taxation changes. If you wish to avail of the advantages of MSME registration for small and medium businesses, then you must choose MSME registration without exception.
Read our article:What is MSME Registration and how to get it?