Top ten advantages of registering a msme in India
MSMEs give rural communities the opportunity to pursue their own interests. By doing this, they benefit society by creating new jobs and diversifying a region’s gross domestic product (GDP). In rural areas of India, they have gradually and slowly regenerated the artisan class by providing work, access to loans, and other services. Additionally, they consistently support infrastructural development, technological innovation, and modernisation of the country and society.
In percentage terms, the MSME sector is impressively responsible for 30% of the country’s GDP, 45% of its manufacturing output, and more than 48% of its exports. The MSME (amendment) bill of 2018 was suggested by the Indian government as a way to support MSMEs and reiterate the importance of the MSME ACT of 2006. To ensure that the essential investments in the machinery and equipment were being made, there would be no need for routine inspections. Additionally, the operations of MSMEs would be allowed to continue being open, impartial, and non-discriminatory.
Advantages of registration for MSME :
Collateral-free bank loans
All small and microbusiness sectors in India now have access to collateral-free funding. To micro and small companies, this programme provides financial assurances. This programme is open to both new and established enterprises. An organisation known as the Credit Guarantee Trust Fund Scheme was established by the Indian government, SIDBI (the small industries development bank of India), and the ministry of micro, small, and medium enterprises. All micro and small businesses are covered by this programme (credit guarantee programme).
Access to international trade
The Indian government provides funding for corporate delegations to attend conferences, trade shows, exhibits, business meetings, and seminars that are held across the world in order to exchange knowledge. Exposure to the more recent facet of industrialisation is made possible by this international collaboration programme
Reduced rate of interest from banks
Compared to other businesses, MSME-registered businesses benefit from reduced financing rates. Priority credit has been kept for the msme industry. MSMEs now receive low interest rate business loans because bank lending to them has surpassed a particular threshold. Credit must increase by 20% to micro and small businesses during the next two years. Microbusinesses are expanding at a 10% yearly rate. The MSME sector must get at least 60% of the bank’s overall lending.
Subsidy on patent registration
MSMEs registered with the MSME ministry are entitled to a 50% reduction on their patent registration fees, under the law. Small businesses and startups are encouraged to keep creating cutting-edge concepts and technologies through this. One may submit an application for the subsidies to the appropriate ministries..
Tax exemption
You can save money that would otherwise be taxable thanks to a number of advantages. Enterprises can gain from a prospective taxation base since it relieves them of the requirement to keep full audit procedures and extensive books of accounts.
Protection against delayed payments
Sometimes customers who buy products or services from SSIs or MSMEs tend to delay payments. The Ministry of Micro, Small and Medium Enterprise supports these companies by allowing them to charge interest on buyer-side payments that are past due. In a fair amount of time, such disputes must be arbitrated and mediated.
When purchasing goods or services from any MSME-registered enterprise, the buyer is obligated to make the payment within 15 days of the day they accepted them from or on or before the payment date that was mutually agreed upon by the MSME or SCI-registered firm. Only if the date of payment is not mentioned is it possible.
If payment is not made within 45 days after acceptance of the goods or services, Buyer shall pay Compound Interest in addition to Interest (charged Monthly) on the Amount. Interest rates are triple what the Reserve Bank of India reported.
Electricity bill concessions
Discounts on electricity bills are available to any companies possessing an MSME registration certificate. As a result, businesses are free to boost production and take on more orders without having to worry about accumulating capital expenses for things like electricity and maintenance. By sending a certificate of registration and an application to the electrical department, micro, small, and medium-sized firms can request the concession.
Reimbursement of ISO certification
If an application is submitted to the proper authority together with their registration certificate, the authorities will not charge MSME-registered enterprises any ISO certificate fees. For MSMEs to operate more effectively throughout the bidding process, ISO certification is necessary.
Marketing and promotion assistance from the government
The Indian government organizes a variety of activities relating to international trade, including craft fairs, exhibitions, and exchange programmes. Being a micro, small, or medium enterprise gives access to these forums for international cooperation with many nations on trade-related issues and promotes new business ties. For MSMEs exporting goods and services, the government also offers subsidies, tax exemptions, and technical support.
Technology upgradation support to MSME
The government pays project costs for these goals for MSME sector units as well as costs incurred for implementing clean technology, creating audit reports, and offering subsidies for licensing items in accordance with national and international standards. It is carried out to boost cost efficiency and encourage the use of clean energy in production.
The government pays project costs for these goals for MSME sector units as well as costs incurred for implementing clean technology, creating audit reports, and offering subsidies for licensing items in accordance with national and international standards. It is carried out to boost cost efficiency and encourage the use of clean energy in production.
