by Pramod Mishra. 28 August 2020

Benefits of MSME Registration Micro-Small & Medium Enterprises (MSMEs)

Benefits of MSME Registration Micro-Small & Medium Enterprises (MSMEs) contribute widely to socio-economic growth. MSMEs come under the Ministry of Micro, Small & Medium Enterprises. The advantage of getting registered under MSME is to avail the benefits and subsidies offered from various Government initiated schemes.

These lower limits are killing the desire for growth as they are unable to scale their businesses further. Also, there has been a long-pending demand for the revision of MSME classification so that they can further extend their business. Now, under the Aatmanirbhar Bharat Abhiyan (ABA), the government updated the MSME classification* by inserting composite criteria of both investment and annual turnover. Also, the differentiation between the manufacturing and the services sectors under the MSME definition has been eliminated. This removal will create equality between the sectors.  

MSME registration process renders many incentives and privileges including financial and non-financial. These MSME registration privileges are associated with the entrepreneurial and trade development of the business.

Helps in getting low-interest rates
In the absence of collateral security, many businesses owners may find it very hard to ensure a loan for starting their industry. But, with an MSME Registration, all banks are specially instructed to offer credits at interest rates, lower than the usual and one may be able to avail of the advantage from numerous banking institutions for their needs.

Income Tax exemption:
MSME registration gives the benefits to save the amount that may be appraisable to tax in the non-existence of the certificate. The benefit of an assumptive basis of taxation is available to companies, which relieves one from maintaining detailed books of accounts and undergoing an audit procedure.

Credit Linked Guarantee Scheme:
The department of Micro, Small and Medium Enterprises, and the Small Industries Development Bank of India (SIDBI) has set a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) especially to implement the Credit Guarantee Fund Scheme. This allows collateral-free credits up to 50 lakhs for individual MSMEs.

Market assistance from the government and Export Promotion:
The Government has organized several replacement programs, craft festivals, exhibitions, and trade-related events universally. Being categorized as a micro, small, or medium enterprise gives the path to all of these platforms for international collaboration on trade-related aspects with many different countries and promotes new business links. The government also boosts the exportation of goods and services by MSMEs by way of subsidies, tax exception, and technological support.

Capital and other grants for infrastructure development:
Since MSMEs is a sector generating employment and giving entrepreneurial ventures a boost, the government also identifies training sectors for MSME and gives capital grants for the improvisation of the infrastructure and support for entrepreneurial development.

Reimbursement of ISO Certification:
To increase the standards and certifications acquired by MSMEs in a bid to improve their performance across sectors, all registered micro and small industries can claim an exemption of all expenses incurred for acquiring ISO 9000, ISO 14001 and HACCP certifications.

Exclusive purchases and sheltering from the competition:
As the role of the MSME Market Development Assistance scheme, the Central authorities follow a Cost and Purchase Choice policy. Wherein more than 358 items are listed under it for independent purchases by Central Government from the medium, micro, and small units only.

Technology and quality up-gradation support to MSMEs
method to enhance the cost-effectiveness and promote clean energy management in manufacturing units, the ministry compensates project costs towards certain goals for MSME sector units and also expenditure incurred for the implementation of clean technology, preparation of audit records, and subsidies for licensing products according to national and international standards.