Blog

Since 2001, things have become more organized and progressive as India’s young population has preferred startups and MSMEs have emerged. MSME industries are the backbone of the economy. The Government of India provides MSME registration. This registration is available to industries classified by the government as Micro, Small, and Medium Enterprises (MSME) in India. As a young country, India is becoming a country that is undergoing a substantial transformation. The government launching beneficial schemes to support the survival and rapid growth of MSMEs.

What is MSME Classification?

The current revised MSME classification considers both investment and annual turnover. It uses these metrics to determine the categorization of an entity as an MSME.

Revised MSME Classification

What is MSME Udyam Registration? 

MSME registration is also called Udyam registration. The entities that fulfil the MSME classification can apply for MSME registration from the government portal, the Udyam portal. The MSME registration is entirely online and can be obtained from the Udyam registration portal. Registration provides a lot of benefits in terms of taxation, setting up the business, credit facilities, and loans.

MSME Registration Benefits

Below listed are the MSME registration benefits:

• Due to MSME Registration India, bank loans become cheaper as the interest rate is very low, around 1-1.5%, much lower than interest on regular loans
• It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
• Once registered the cost of getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available
• MSME registration helps to acquire government tenders easily as the Udyam Registration Portal is integrated with the Government e-Marketplace and various other State Government portals which give easy access to their marketplace and e-tenders
• There is a One -Time Settlement Fee for non-paid amounts of MSME
• The MSME registration will help the MSMEs avail the benefits of government schemes. These include the Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Public Procurement Policy, and Protection against delayed payments, etc.
• MSMEs are eligible for priority sector lending from banks
• MSMEs get the benefit of a government security deposit waiver that is helpful while participating in e-tenders
• Any number of activities, including service or manufacturing or both, may be added or specified in one MSME registration
• Barcode registration subsidy
• Exemption scheme from direct taxes
• ISO certification fee reimbursement
• Electricity bills concession
• Special consideration in International trade fairs

MSME Registration Eligibility

All manufacturing, service industries, wholesale, and retail trade can apply for MSME registration. They must fulfil the revised MSME classification criteria of annual turnover and investment. Thus, the eligibility for MSME registration depends on an entity’s annual turnover and investment. The following entities are eligible for MSME registration:

• Individuals, startups, business owners, and entrepreneurs
• Private and public limited companies
• Sole proprietorship
• Partnership firm
• Limited Liability Partnerships (LLPs)
• Self Help Groups (SHGs)
• Co-operative societies
• Trusts

Documents Required for MSME Registration

The MSME registration documents are as follows:

• Aadhaar card
• PAN card

MSME Registration Fees

There are no fees charged by the government for MSME registration. It is free of cost on the official website, i.e. Udyam Portal.