MSME stands for Micro small and medium enterprises. They are small sized entities defined in terms of their investment.
They perform a critical role in the economy by providing employment to a large number of people who can be unskilled and semi-skilled. Thereby contributing to exports, raising manufacturing sector production and extending support to bigger industries by supplying raw material, basic goods, finished parts, and components, etc.
Obtaining MSME registrations can be done by micro, small and medium-sized enterprises. Notably, these are the major business units that drive our economy and its growth. The MSME registration is an online process and makes seeking help from professionals much more easier. Here in this article, we will understand the benefits of getting MSME registration for your business.
Benefits of MSME Registration
- Priority Lending: Whether you’re the proud owner of a cutting-edge technology business or a masala packing company, employing rural women, credit and loan are something that your business will inevitably require for long- and short-term financing. Banks, by virtue of the directions issued by the Reserve Bank of India, have certain earmarked funds that have to mandatorily be given to MSME businesses. Producing this certificate entitles one to avail this loan on a priority basis with fewer hassles.
- Fewer interest rates and availability and access to greater credit: In the absence of collateral security (any property/cash given as a security against a loan), many business owners may find it extremely hard to secure a loan for starting in their industry. However, with an MSME Registration, all banks are specifically instructed to offer loans at interest rates lower than the usual and one may be able to avail this benefit from several banking institutions for their financing needs
- Income Tax exemption: There are several benefits that can save lakhs of the amount that may be assessable to tax in the absence of this certificate. The benefit of a presumptive basis of taxation is available to enterprises, which relieves one from maintaining detailed books of accounts and undergoing audit procedures.
- Credit Linked Guarantee Scheme: The Ministry of Micro, Small and Medium Enterprises and the Small Industries Development Bank of India (SIDBI) have established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) specifically to implement Credit Guarantee Fund Scheme for micro and small enterprises. This scheme allows collateral-free loans of up to 50 lakhs for individual MSMEs.
- Market assistance from the government and Export Promotion: The Government of India organizes several exchange programs, craft fairs, exhibitions, and trade-related events internationally. Being categorized as a micro, small or medium enterprise gives access to all of these platforms for international cooperation on trade-related aspects with different countries and fosters new business connections. The government also incentivizes the export of goods and services by MSMEs by way of subsidies, tax exemption, and technical 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 improvisation of the infrastructure and support for entrepreneurial development.
- Reimbursement of ISO Certification: To promote the standards and certifications received by MSMEs in a bid to enhance their performance across sectors, all registered micro and small industries can avail an exemption of all expenses incurred for obtaining ISO 9000, ISO 14001 and HACCP certifications.
- Exclusive purchases and sheltering from the competition: As part of the MSME Market Development Assistance scheme, the Central Government follows a Price and Purchase Preference policy under which more than 358 items are listed for exclusive purchases by Central Government from the medium, micro and small units only.
- Technology and quality upgradation support to MSMEs: In order to enhance the cost-effectiveness and promote clean energy use in manufacturing, the government reimburses project costs towards these goals for MSME sector units and also expenditure incurred for the implementation of clean technology, preparation of audit report and subsidies for licensing products according to national and international standards.
MSME is beneficiary source for our nation, MSME registration is necessary for every small and medium business in India. By MSME registration you can avail various government benefits and government schemes.
It is possible to register MSME by visiting Online MSME registration portal in India.
Along with that, you can manage your accounts and banking related in queries with the help of EZOTO Software – By Downloading this Billing Software you would be able to manage invoice, accounting, credit, inventory, customers, etc and fulfill all your accounting needs