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In India, MSMEs contribute nearly 8% of the country’s GDP, around 45% of the manufacturing output, and approximately 40% of the country’s exports. It won’t be wrong to refer them as the ‘Backbone of the country.’
The Government of India has introduced MSME or Micro, Small, and Medium Enterprises in agreement with Micro, Small and Medium Enterprises Development (MSMED) Act of 2006. These enterprises primarily engaged in the production, manufacturing, processing, or preservation of goods and commodities.
MSMEs are an important sector for the Indian economy and have contributed immensely to the country’s socio-economic development. It not only generates employment opportunities but also works hand-in-hand towards the development of the nation’s backward and rural areas. According to the annual report by the Government (2018-19), there are around 6,08,41,245 MSMEs in India.
Even if the Company is in the manufacturing line or the service line, registrations for both these areas can be obtained through the MSME act. This registration is not yet made mandatory by the Government but it is beneficial to get one’s business registered under this because it provides a lot of benefits in terms of taxation, setting up the business, credit facilities, loans etc.
Benefits of MSME Registration
- Due to the MSME Registration, the bank loans become cheaper as the interest rate is very low around 1% to 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 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 Udyam Registration Portal is integrated with Government e-Marketplace and various 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.
If you are not sure whether your entity falls under MSME definition or are looking for a professional to support you in obtaining a MSME registration certificate, we are there for you. Get in touch with our expert team for more details.