The Indian government has always been in favour of providing benefits to Micro, small and medium enterprises (MSMEs). There are many advantages of obtaining MSME registration in India, which can be only availed if the business had registered itself as an MSME/SSI under MSME Act.
Retail, wholesale traders now get MSME tag
The Union government on Friday, 2nd July 2021, announced fresh guidelines to include wholesale and retail trades as MSMEs in a move that is expected to benefit as many as 25 million traders battered by the Covid-19 pandemic.
Key benefit which the traders can now avail is that of priority sector lending (PSL). Loans given to the MSME sector come under priority sector lending.
BENEFITS OF MSME REGISTRATION
1. Bank Loans (Collateral Free)
The Government of India has made collateral-free credit available to all small and micro business sectors. This initiative guarantees funds to micro and small sector enterprises. Under this scheme, both the old as well as the new enterprises can claim the benefits. A trust named The Credit Guarantee Trust Fund Scheme was introduced by the GOI, SIDBI and the Ministry of MSME to make sure this scheme is implemented (Credit Guarantee Scheme) for all Micro and Small Enterprise.
2. Subsidy on Patent Registration
50% subsidy is given to the Enterprise that has the certificate of registration granted by MSME. This subsidy can be availed for patent registration by giving application to respective ministry.
3. Overdraft Interest Rate Exemption
Businesses or enterprises registered under MSME can avail a benefit of 1% on the Over Draft as mentioned in a scheme that differs from bank to bank.
4. Industrial Promotion Subsidy Eligibility
Enterprises registered under MSME are also eligible for a subsidy for Industrial Promotion as suggested by the Government.
5. Protection against Payments (Delayed Payments)
At times, the buyers of services or products from the MSME’s or SSIs tend to delay the payment. The Ministry of Micro, Small and Medium Enterprise lend a helping hand to such enterprises by giving them the right to collect interest on the payments that are delayed from the buyer’s side. The settlement of such disputes must be done in minimum time through conciliation and arbitration.
In case, if any MSME registered enterprise supplies any goods or services to a buyer then the buyer is required to make the payment on or before the agreed date of payment or within 15 days from the day they had accepted the goods and services from MSME or SCI registered business (if there is no mention of the date of payment).
If the buyer delays the payment for more than 45 days after accepting the products or services then the buyer has to pay compound interest along with interests (monthly) on the amount that was agreed to be paid. The interest rate is three times the rate that is notified by the Reserve Bank of India.
6. Fewer Electricity Bills
This concession is available to all the Enterprises that have the MSME Registration Certificate by providing an application to the department of the electricity along with the certificate of registration by MSME.
7. ISO Certification Charges Reimbursement
The registered MSME enterprises can claim the reimbursement of the expenses that were spent for the ISO certification.
8. Other Benefits:
- Ease of obtaining licenses, registrations and approvals.
- International trade fair special consideration
- Government security deposit waiver (while participating in tenders)
- Barcode registration subsidy
- IPS subsidy eligibility