Small scale industries often abbreviated as SSI are those industries in which the manufacturing, production and rendering of services are done on a small or micro scale. The government of India is trying to promote these small scale industries for creating employment opportunities in the remote areas that too, with low capital investment. Businesses having SSI registration gets a higher preference for government license and certification and easy access to credit. In this article, we will see the characteristics, objectives, benefits and the registration procedure of the SSI units.
A brief about the SSI and SSI Registration –
The industries which manufacture products and render services with the help of small machines and less workforce are called Small Scale Industries. SSI units whose investment in plant and machinery is less than INR 10 Million should seek registration form the Director of Industries of their concerned State Government. The primary purpose of SSI registration is to maintain the statistics of the SSI units operating in India and providing incentives and support services to these units. Some states also have a “SIDO (Small Industries Development organisation) Registration Scheme” and a “State Registration Scheme”.
Here is a list of industries which operate under the SSI units:
- Water bottles
- Leather Belt
- Small toys
- Paper bags
- Bakeries and many more.
What are the benefits of SSI Registration?
After registering as an SSI unit, these small scale industries can avail benefits, incentives or support either by the Central or State Government. The regime of the incentives contains the following:
- Differential rate of interest, Credit Prescription
- Excise Exception Scheme
- Exemption under Direct Tax Laws
- Statutory supports such as Reservation and Interest on delayed Payments etc.
What are the Objectives of the SSI registrations Scheme?
- To itemise and maintain a record of small industries to which the package of incentives and supports are targeted.
- The SSI Registration Scheme provides a certificate enabling the units to avail statutory benefits in terms of protection.
- It provides a Statistics of the SSI units working in India.
- It aims to create nodal centres at the Centre, state and District levels to promote SSI.
Read our article:What are The Government Schemes Launched by MSME?
What are the Features of the SSI Registration Scheme?
- Under the SSI Registration Scheme, DIC (District Industries Centre) is the primary registering Centre.
- Also, the registration procedure is not mandatory. It’s a voluntary process.
- There are two kinds of registration done in all the states. At first, a Provisional Certificate is given, and a permanent registration certificate is given after the commencement of production.
- The PRC (Permanent Registration Certificate) usually is valid for five years, and permanent registration is given in perpetuity.
What is Permanent Registration Certificate?
The Permanent Registration Certificate is a provision given to the SSI units before commencing the business or service. It enables the unit to obtain the term loans and working capital from financial institutions and banks under the priority sector lending. After obtaining the PRC, you can also obtain facilities for accommodation, land and other amenities. Also, you can obtain various necessary NOCs and clearances from regulatory bodies such as Pollution Control Board, Labor Regulation etc.
What are the benefits SSI units enjoy after getting the PRC?
- The SSI units get income tax exemption and Sales Tax Exemption as per the State Govt. policy.
- The SSI units enjoy incentives and concessions in power tariff.
- The SSI units get price and purchase preference for goods produced.
- Easy availability of raw materials.
Benefits of obtaining SSI registration
- Tax rebates to the SSI units.
- The SSI units can enjoy the credit for MAT (Minimum Alternate Tax) up to 15 years. Previously the duration was just ten years.
- The easily get many government tenders.
- The SSI units, after obtaining the SSI registration, get easy access to the credit.
- The cost of acquiring a patent and setting up the industry reduces as many rebates and concessions are available after getting the SSI registration.
- Businesses having SSI registration gets a higher preference for government license and certification and easy access to credit.
What are the Documents required for obtaining the SSI Registration Certificate?
Checklist of Documents required for obtaining the SSI Registration Certificate:
- Aadhar number
- Industry name and its address
- Bank account details.
What is the Procedure for obtaining the SSI registration?
The procedure for obtaining the SSI Registration is given below:
Apply for the PRC
Any SSI unit that does not require an industrial license can apply for PRC provided that the items are listed in the Schedule III and not in Schedule I and Schedule II of the licensing Exemption Notification. Units having workforce less than 50/100 workers with or without power can apply for registration even for those items included in Schedule III.
The SSI units can apply for PRC in the prescribed application form. The next step involves the issuance of PRC in which no field enquiry is done.
After obtaining this certificate, the newly established business can get a loan under the priority sector. It also provides facilities for accommodation, land and other amenities.
Applying for Permanent SSI Registration
After obtaining the SSI Provisional Registration Certificate, you can apply for the permanent registration to the MSMEs.
The important thing is that the registration is granted if the following conditions are satisfied by the small scale industry:
- The SSI units have obtained all the necessary statutory and administrative clearances.
- The value of the plant and machinery do not exceed the prescribed limits.
- The SSI units shall not be owned and controlled by any other industrial undertaking.
De-registration of the SSI Certificate
The registered SSI units are liable for de-registration if –
- It crosses the specified investment limits into Plant and Machinery.
- It starts to produce those items which are not listed in the Schedule I and Schedule II of the licensing Exemption Notification.
- It starts to produce those items which require any industrial license.
- It is owned, controlled or is a subsidiary of any other industrial undertaking.
- It fails to comply with any regulation or restriction.
The SSI units are the lifeline of the Indian Economy and are a significant source of employment for developing countries like India. They use limited technology and resource availability in fewer workforces. If you want to have your own business and be self-reliant, you can opt for the SSI units as there are various tax rebates and other benefits offered to these MSMEs units.
For any assistance related to SSI Registration, please feel free to reach us at Corpbiz.
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