The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under:
Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:
• A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh;
• A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore;
• A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.
• In case of the above enterprises, investment in plant and machinery is the original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No.S.O.1722(E) dated October 5, 2006 .
Enterprises engaged in providing or rendering of services and whose investment in equipment (original cost excluding land and building and furniture, fittings) and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006 are specified below.
• A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10 lakh;
• A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore;
• A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.
1. To do the registration the small and medium scale industry owner has to fill a single form which he can do online as well as offline.
2. If a person wants to do registration for more than one industry then also he/she can do individual registration.
3. To do the registration he/she has to fill a single form which is available at the website which is listed below.
4. The document required for the registration is Personal Aadhar number, Industry name, Address, bank account details and some common information.
5. In this, the person can provide self-certified certificates.
6. There are no registration fees required for this process.
7. Once the detail-filled and upload you would be getting the registration number.
Benefits of MSME Registration
1. 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.
2. There are various tax rebates offered to MSME.
3. It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
4. There are many government tenders which are only open to the MSME Industries.
5. They get easy access to credit.
6. Once registered the cost getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available.
7. Business registered under MSME are given higher preference for government license and certification.
8. There is a One Time Settlement Fee for non-paid amounts of MSME