MSME Registration Benefits in India
MSME stands for micro, small and medium enterprises, and these are the backbone of any developing economy. To support and promote MSMEs, the Government of India through various subsidies, schemes and incentives promote MSMEs through the MSMED Act. To avail, the benefits under the MSMED Act from the Central or State Government and the Banking Sector, Udyog Aadhar or MSME Registration is required.
MSME stands for micro, small and medium enterprises and any enterprise that falls under any of these three categories. MSME enterprises are the backbone of any economy and are an engine of economic growth, promoting equitable development for all. MSME Enterprises are typically more labour intensive than large corporates and provide tremendous employment potential at a very low capital cost. MSME also share a major portion of industrial production and exports in India. It also plays a pivotal role in the development of the industrial economy.
Therefore, to promote and develop MSMEs; the MSMED Act of India facilitates the promotion and development of enterprises through many incentives, schemes and subsidies. To obtain the benefits under the MSMED Act, MSME Registration is a must and proprietorship firms, partnership firms, LLPs, Private Limited Company’s and Public Limited Companies can register.
BENEFITS OF MSME REGISTRATION
The MSME registration is not statutory. However, the MSME registration process in India has been conceptualised to provide maximum benefits to all types of enterprises. After registration, any enterprise becomes qualified to reap the benefits offered under the MSMED Act. Some of the benefits from Central Government include easy sanction of bank loans (Priority sector lending), lower rates of interest, excise exemption scheme, the exemption under Direct Tax Laws and statutory support such as reservation and the Interest on Delayed Payments Act.
State Government and Union Territories also have complied their own package of facilities and incentives for MSMEs. Some of the benefits provided by the State Government for MSMEs include the development of specialized industrial estates, tax subsidies, power tariff subsidies, capital investment subsidies and other support. Both the Centre and the State, whether under law or otherwise, target their incentives and support packages generally to units registered with them.
Banking Laws, Excise Law and the Direct Taxes Law have incorporated the word MSME in their exemption notifications. Therefore, the registration certificate issued by the registering authority is seen as proof of being MSME and is required to avail the benefits sanctioned for MSMEs.