Get MSME registration in order get access to many incentives provided by the government under the MSME act.
MSME (Micro, Small, and Medium Enterprises), as the name suggests, includes enterprises that are at a medium or below the medium level with respect to the terms of production and investment and sales. MSME, in India, regulated under MSMED Act, 2006
MSME registration is not mandatory for businesses. However it is always advisable to register under MSME scheme as it is beneficial for business and provides a lots of benefits like lower rate of interest, collateral free loan, tax subsidies, exemption in excise, Capital investment subsidies etc.
MSME are differentiated on the basis of their investment in their equipment and machinery and the category is as below:
Investment in Machinery: Not more than INR 25 lakh
Investment in equipment: Not more than INR 10 lakh
Investment in Machinery: Between INR 25 lakh and 5 Crore
Investment in equipment: between INR 10 lakh and 2 Crore
Investment in Machinery: Between INR 5 Crore and 10 Crore
Investment in equipment: Between INR 2 Crore and 5 Crore
Proof of ownership of premises i.e. Lease Deed/Property tax receipt/Rent agreement/NOC.
Three passport size photographs of proprietors/partners/Directors
PAN Card and Aadhar Card of proprietors/partners/Directors
Bank Account Information (bank statement and cancelled cheque)
Valid E-mail ID and Mobile No
Declaration required regarding Amount of Investment in Plant and Machinery on Letter Head
A Medium enterprise engaged in the manufacture or production of goods need to compulsorily register under the MSMED Act. for other Enterprises the registration is discretionary and optional.
MSMEs are recognized by all the institutions and banks. Special schemes been drafted to recognize them as well. Banks always prefer MSMEs instead of normal enterprises to lend loans. The possibility of getting a sanctioned loan is much higher in a case of MSME. Bank loan interest rates will also be lower. There may also be a preferential treatment if repayment is delay.
So many benefits are getting by MSME from state and central government. Many state governments prefer enterprises which are registered under MSMED Act. Subsidy such as on power, taxes, and much more is offered by state governments. In most of the states,sales tax exemption is provided purchase preferences is given on goods produced. The enterprise may also relish excise exemption scheme and exemption from certain direct taxes in the initial years of your business.
Investment Category for Manufacturing Sector if for Micro Enterprises - Till 25 lakh b. Small Enterprises - 25 lakh - 5 cr. c. Medium Enterprises - 5cr-10cr
Service Sector category on the basic of investment a. Micro Enterprises - Till 10 lakh b. Small Enterprises - 10 lakh-2 cr c. Medium Enterprises - 2cr -5 cr