Udyam Aadhaar Registration (formerly known as MSME registration) is a government initiative that helps MSMEs with their finances and operations. This registration cum scheme opens a host of opportunities for small businesses in terms of finances, trade, and market reach. In this article, we will take a close look at the potential Udyam registration benefits worth every attention.
A Breakdown of Frontline Udyam Registration benefits
Here is the breakdown of different Udyam registration benefits that serve as a boon for small businesses in India:
Access to Collateral Free Loans
Business expansion or arrangement of finances to cater to daily operations is a daunting task for small businesses. The prolonged shortage of funds can add to the frustration of the owner. MSME-registered firms stay atop such nuisances as they are eligible for special loans that attract no collateral whatsoever. The scheme like Credit Guarantee Trust Fund is already serving the MSME sector with a host of lucrative credit schemes. Udyam registration is a way to success and growth for financially-aggrieved entities.
Reduced Patent Registration costs
Patent registration incurs considerable time, energy, and cost for the individual. However, this is not true for registered MSMEs as they have access to a 50 percent subsidy for patenting endeavors. Patenting an innovative business idea or process is not costly for MSMEs anymore.
Exemption on Overdraft Interest Fee
Registered MSMEs have access to a 1 percent discount concerning interest paid on their overdraft, if any, from any financial avenue or bank.
Industrial Promotion Subsidy Eligibility
This is one of the main Udyam registration benefits. Registered MSMEs have access to Government-backed Industrial Promotion subsidies. These subsidies ease the finances relating to business promotion, which helps in augmenting business growth. With such subsidies, cross-border business promotion is also possible. Industrial Promotion subsidies enable businesses to partake in promotional events, business fairs, and other platforms that ensure one-to-one interaction with other entities.
Protection Against Delayed Payments
For years, MSMEs have been dealing with fundamental issues like deferred payments from vendors. It restrains them to carry out their daily operation with ease. In worst cases, the prolonged payment delays resulted in payment default. This is a serious subject matter for entities lacking adequate funding. The Government has taken a welcome step in this direction that compels vendors to pay dues within 45 days from the date of disbursement of services or goods. Late payment would lead defaulters to pay 3x of the RBI interest rates alongside the outstanding payment. Registered MSMEs in India have access to such an arrangement.
Subsidy on Electricity Bills
Registered MSMEs stand qualified for subsidies on electricity bills, which constitute the major part of the entities’ expenditure. With this, entities can augment their production volume without worrying about ever-rising energy expenses.
Free access to ISO Certification
Registered MSMEs have free access to globally-recognized ISO certification that vouches for the quality of the product. The Government of India will take care of the expenses concerning ISO application and paperwork. Such reimbursement is not available to non-registered MSMEs.
Extended Tax Benefits
For MSMEs registered with Udhyam registration, credit for MAT i.e. minimum alternate tax could be extended for the time span of 15 years, which otherwise is ten years for other entities.
Access to the Government-based Tenders
Registered MSMEs experience no work shortage thanks to the availability of government-based tenders hosted by the Udyam Registration Portal. The portal ensures easy bidding and procurement without the intervention of any mediator. This is one of the prominent Udyham registration benefits accessible to small businesses.
One-Time Settlement fees concerning payments defaults
Staying atop expenses and daily finances is difficult for all small businesses. That is why they often themselves amid fiscal chaos, which further translates to frequent payment defaults. Knowing the financial standing of MSME industries nationwide, GOI has introduced an arrangement that enables financially-aggrieved entities to pay all their dues via one-time settlement fees.
The MSME sector has remained the backbone of the Industrial economy in India for years. Its monumental contribution towards GDP deserves every accolade. The MSME sector constitutes a large percentage of small to moderate-sized industries, with most of them financially incapable due to the disrupted cash flow. All the Udyam registration benefits mentioned above keep entities afloat during financial crises triggered by different events.
Read Our Article: MSME Udyam Registration Process & Penalty