Top 30 Best Benefits of MSME Registration

Top 30 Best Benefits of MSME Registration

MSME is an abbreviation for Micro, Small, and Medium Enterprises. In a developing economy like India, such entities are considered one of the most important parts of economic development. The Indian government has introduced several benefits of MSME registration to facilitate and encourage such entities to get enrolled and registered under MSME.

This blog post explains the Top 23 best benefits of MSME registration for small and medium-sized industries. In this regard, MSME registration helps businesses get easy access to credit, lower interest rates, and protection against delayed payments. 

Various government schemes like the Credit Guarantee Scheme and the Credit Linked Capital Subsidy Scheme help registered MSMEs enjoy financial assistance and technological upgradation.

What is the MSME?

What is the MSME?

MSME is an abbreviation for Micro, Small, and Medium Enterprises. It refers to enterprises that fall into certain size categories based on their investment in plant and machinery, equipment, and turnover. 

Generally, the backbone of economic growth is MSMEs, which generate employment for millions while contributing to exports, thereby aiding industrialization mainly in developing countries like India.

The classification for MSMEs in India is as follows:

  1. Micro Enterprises: Investment in plant and machinery or equipment up to ₹1 crore, and turnover up to ₹5 crore.
  2. Small Enterprises: Investment up to ₹10 crores, and turnover up to ₹50 crores.
  3. Medium Enterprises: Investment up to ₹50 crores, and turnover up to ₹250 crores.

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What is the MSME Registration?

It is the recognition procedure done by the government as a micro, small, or medium enterprise. The registration is under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006. Thus, such registration would attract various benefits to them: 

  • Government Schemes Accessing Benefits: MSMEs can have benefits in terms of subsidies, tax exemptions, and government contracts.
  • Easier Access to Loans: MSME-registered businesses have easier access to loans at a lower rate of interest.
  • Protection from Delayed Payments: During MSME registration, the business is provided with legal protection over delayed payments by buyers.
  • Concessions in Electricity and Fees: The state governments offer many concessions on electricity bills, along with registration fees on patents and trademarks, to the registered MSMEs.

If you also want to know about the MSME registration then just click here

What are the Top 23 Benefits of MSME Registration?

What are the Top 23 Benefits of MSME Registration?

We have mentioned all the names of the top 20 benefits of total MSME registration in a nice manner below:

  1. Collateral-free bank loans
  2. Reduced rate of interest from banks
  3. Overdraft Interest Subvention
  4. Credit Guarantee Scheme
  5. Lower Interest Rates
  6. Credit Linked Capital Subsidy
  7. Interest on Overdue Payments
  8. Concessions on Stamp Duty and Registration Fees
  9. Subsidy on Patent Registration
  10. Industrial Promotion Subsidy
  11. Marketing and promotion assistance
  12. Technology upgradation support
  13. Environmental and Quality Management Subsidies
  14. Barcode Registration Subsidy
  15. Access to Business Incubators
  16. Protection against Delayed Payments
  17. Timely Payments by Buyers
  18. Priority in Sector-Specific Schemes
  19. Single-Window Clearances
  20. Preference in International Trade Fairs
  21. Electricity bill concessions
  22. Reimbursement of ISO certification
  23. Market Support Through Government Tenders

All the above benefits of MSME registration are divided into a total of 4 categories which are Financial Benefits, Government Assistance, Operational Benefits, and other benefits Now we are presenting some information to all of you about the benefits of MSME registration.

These are the top 23 benefits of MSME registration:

  • Collateral-free bank loans: MSMEs get easy funds without any collateral, allowing them to grow easily.
  • Reduced interest rates: MSMEs get cheap bank loans at less expensive interest rates to avail of loans.
  • Overdraft Interest Subvention: MSMEs get interest discounts on overdrafts, which reduces their financial burden.
  • Credit Guarantee Scheme: It provides loan support without any third-party guarantee while improving the flow of credit.
  • Lower Interest Rates: MSMEs receive loans at lower rates, which will help improve cash flow.
  • Credit Linked Capital Subsidy: This program motivates MSMEs to adopt modernization by giving subsidies for adopting new technology or capital equipment.
  • Interest on overdue payments: MSMEs are eligible to get interest on delayed payments received from buyers.
  • Stamp duty and registration fee concessions: Exemption from stamp duty and registration fees is available in various legal and property deals.
  • Subsidy on Patent Registration: MSMEs are provided with financial assistance towards filing patents, which encourages innovation.
  • Industrial Promotion Subsidy: Financial incentives are provided to promote MSME growth in key sectors.
  • Marketing and promotion assistance: MSMEs get government support for marketing and promotional activities, enhancing their visibility.
  • Technology upgradation support: Assistance is given to MSMEs for adopting advanced technologies, improving productivity.
  • Environmental and Quality Management Subsidies: It Grants to enhance the implementation of quality and environment management systems.
  • Bar Code Registration Subsidy: Our government offers subsidies on MSMEs for Bar code registration to make their supply chain management better.
  • Access to Business Incubators: MSMEs offer easy access to incubators for mentorship, funding, and business development support.
  • Protection against delayed payments: The Ministry of Micro, Small, and Medium Enterprises has legal protection against delayed payments by the buyer so that any amount is received on time.
  • Timely payments by buyers: The government directs buyers to make timely payments to MSMEs so that they can avoid cash flow.
  • Priority in Sector-Specific Schemes: The Key sectors for MSMEs to be prioritized under sector-specific schemes.
  • Single-Window Clearances: MSMEs get a more streamlined, single-window clearance process for various types of licenses and permits.
  • Preference in International Trade Fairs: It ensures the participation of MSMEs in international trade fairs and thus maximizes export opportunities.
  • Electricity Bill Concessions: Concessions to MSMEs, will reduce their electricity bills and hence reduce operational costs.
  • Reimbursement of ISO Certification: ISO certification reimbursement to MSMEs will help in enforcing quality standards among them.
  • Market Support Through Government Tenders: This source of market support gives preference to MSMEs in government tenders, thereby improving business opportunities.

What are the Tax Benefits of MSME?

What are the Tax Benefits of MSME?

Many people get huge MSME tax benefits which we have mentioned in detail below:

  • Direct Tax Exemptions: There are direct tax exemptions given by the Income Tax Act under the income tax structure that can easily reduce the aggregate tax liability for MSMEs.
  • GST Concessions: MSMEs have more relaxed norms and threshold values ​​for registration under GST, thereby making it easier for small businesses to handle compliance more effectively.
  • Carrying Forward of Losses: A change in ownership has no impact on an MSME in terms of carrying forward its losses from previous years, which consequently reduces the taxable income in subsequent years.
  • Credit for MAT: MSME can carry over the credit for MAT for up to 15 years.
  • Depreciation Deduction: MSMEs under the MSME Act enjoy accelerated depreciation upon plant and machinery, thereby reducing the tax base and encouraging reinvestment of the same in other business assets.

How Long is MSME Valid?

How Long is MSME Valid?

MSME registration is completely permanent and renewable as well. The moment an enterprise gets registered under the portal for MSME or Udyam registration, the registration remains active as long as the enterprise meets the classification criteria of the government. 

However, if the turnover or investment of the business changes significantly, the classification may need to be updated and moved to another category.

If you also need any information related to MSME renewal, then whether you have to complete its process you can tell by clicking here.

In Conclusion

MSME registration serves as a powerful tool through which small and medium enterprises can avail a range of benefits ranging from financial assistance and government subsidies to access to markets. 

These incentives not only accelerate business growth but also help create a competitive advantage. Thus, registration under the MSME Act can become a crucial step in the long-term success of an enterprise through the said Act.

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FAQs

Q1. What is the benefit of MSME eligibility?

MSME eligibility opens up access to government schemes, financial aid, and tax benefits. Enterprises eligible for such registration get easy access to loans, lower interest rates, and priority in procurement and contracts.

Q2. What is the profit of MSME Registration?

It offers multitasking benefits of MSME registration and the availability of loans without any collateral, subsidies, and open mandate in government tenders. It gives the necessary financial support, legitimate protection against delayed payments, and the assurance that it will grow with lower costs and better markets.

Q3. Who is eligible for MSME Registration?

Any business where manufacturing or service production takes place is eligible to register for MSME if that business is a proprietorship, partnership, company, or cooperative and falls within the investment and turnover limits given for micro, small, or medium enterprises.

Q4. How much money is required for MSME registration?

MSME registration is free of cost in India when done through the official Udyam Registration portal. There are no government fees involved in the registration process.

Q5. What is the MSME 15-day rule?

The MSME 15-day rule is a government directive that all applications for availing benefits of MSME registration, loans, and subsidies should be processed and approved within 15 days, and hence enjoy faster access to support.

Q6. What is the 45-day MSME rule?

The 45-day rule requires that all payments from the buyer for MSME goods or services be received within 45 days. If payment is received after this period, the buyer is liable to pay compound interest on the amount due to the MSME.

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