MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy. When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries or SSI’s.
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.
The MSME became operational on October 02, 2006. It was established to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises.
What are Micro, Small and Medium Enterprise?
Previously the existing MSME classification was based on the criteria of investment in plant and machinery or equipment. So, to enjoy the MSME benefits, the MSMEs have to limit their investment to a lower limit, as mentioned below:
| Existing MSME Classification | ||||
| Sector | Criteria | Micro | Small | Medium |
| Manufacturing | Investment | < Rs.25 lakh | < Rs.5 crore | < Rs.10 crore |
| Services | Investment | < Rs.10 lakh | < Rs.2 crore | < Rs.5 crore |
These lower limits were killing the urge to grow as they were unable to scale their businesses further. Also, there had been a long-pending demand for the revision of MSME classification so that they can further expand their operations while continuing to avail the MSME benefits.
Now, under the Aatmanirbhar Bharat Abhiyan (ABA), the government revised the MSME classification by inserting composite criteria of both investment and annual turnover. Also, the distinction between the manufacturing and the services sectors under the MSME definition was removed. The following is the current revised MSME classification, where the investment and annual turnover are to be considered for deciding an MSME.
| Revised MSME Classification | |||
| Criteria | Micro | Small | Medium* |
| Investment & Annual Turnover | Investment less than Rs. 1 crore Turnover less than Rs. 5 crore | Investment less than Rs. 10 crore Turnover up to Rs. 50 crore | Investment less than Rs. 50 crore Turnover up to Rs. 250 crore |
Documents Required for MSME Registration
Aadhaar Card and PAN Card are the only documents required for MSME registration. MSME registration is fully online and no proof of documents is required. PAN and GST linked details on investment and turnover of enterprises will be taken automatically by the Udyam Registration Portal from the Government databases. The Udyam Registration Portal is fully integrated with Income Tax and GSTIN systems.
GST is not compulsory for enterprises that do not require a GST registration under the GST law. However, the enterprises that need to compulsorily obtain GST registration under the GST regime need to have GST registration for obtaining Udyam Registration.
Those who have UAM registration or any other registration issued by any authority under the Ministry of MSME, will have to re-register themselves in the Udyam Registration Portal by clicking on the “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II”.
The enterprises having UAM registration need to migrate to Udyam Registration by 31/12/2021. If the entrepreneurs having UAM registration do not migrate to Udyam Registration by 31/12/2021, the UAM registration will be invalid and they will not be able to receive the benefits provided to the MSMEs.
MSME Registration Fees
The MSME Registration can be obtained by applying only on the Udyam portal. There are no fees charged for filling and submitting the MSME registration form. The MSME registration is totally free on the Udyam portal.
MSME Registration Certificate
After submitting the MSME registration form online, a message of successful registration with a reference number will appear. The Ministry of MSME will issue the Udyam Registration certificate or MSME certificate to the email ID of the entrepreneur after verification of the registration form submitted on the portal.
The Ministry will issue the MSME certificate after a few days from the submission of the registration form. The MSME registration certificate validity is for a lifetime. Thus, it requires no renewal.
Get MSME Certificate Online
The entrepreneurs can also download the MSME certificate online by visiting the Udyam Registration portal. The process to get the MSME registration certificate online is as follows:
- On the homepage of the portal, the entrepreneurs have to click on the ‘Print/Verify’ tab and click on the ‘Print Udyam Certificate’ option.
- The next page will open where the entrepreneurs have to enter the Udyam Registration Number, mobile number, choose the OTP option and click on the ‘Validate and Generate OTP’ button.
- Enter the OTP received on the mobile number or email ID and click on the ‘Validate OTP and Print’ button.
The MSME registration certificate will appear and you can print the MSME registration certificate from the page. An entrepreneur can check the MSME registration number from the reference number given after the submission of the MSME registration form.
For getting the MSME registration number, an entrepreneur needs to click on the ‘Verify Udyam Registration Number’ option under the ‘Print/Verify’ tab on the homepage. A new page will open and the entrepreneurs have to enter the reference number, captcha code and click on ‘Verify’ button. The details of the MSME along with the MSME registration number will appear on the screen.
MSME Helpline Number
Helpline number for general queries related to MSME – 011-23063288.
Helpline number for Udyam Registration or Udyam Registration Certificate related for administration queries -011-23063800
Helpline number for Udyam Registration or Udyam Registration Certificate related for Technical queries – 011-23062354
MSME contact address – Ministry of Micro, Small and Medium Enterprises, Udyog Bhawan, Rafi Marg, New Delhi – 110011.
MSME web information manager address – Ministry of Micro, Small and Medium Enterprises, Room No 468 C, Udyog Bhawan, Rafi Marg, New Delhi – 110011. E-mail : mayapandey.dgca@gov.in
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 of 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 other 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.
- The Udyam Registration will help the MSMEs in availing the benefits of government schemes such as Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Public Procurement Policy, Protection against delayed payments, etc.
- MSMEs are eligible for priority sector lending from banks.
- MSMEs get the benefit of a government security deposit waiver that is helpful while participating in e-tenders.
- Any number of activities including service or manufacturing or both may be added or specified in one Registration.
- Barcode registration subsidy.
- Exemption scheme from Direct taxes.
- ISO certification fees reimbursement.
- Electricity bills concession.
- Special consideration in International trade fairs.
MSME Schemes Launched by the Government
- Prime Minister Employment Generation Programme and Other Credit Support Schemes –
- Prime Minister Employment Generation Programme(PMEGP)
- Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)
- Interest Subsidy Eligibility Certificate (ISEC)
- Development of Khadi, Village and Coir Industries –
- Science and Technology Scheme
- Market Promotion & Development Scheme (MPDA)
- Revamped Scheme Of Fund for Regeneration Of Traditional Industries (SFURTI)
- Coir Vikas Yojana (CVY)
- Technology Upgradation and Quality Certification –
- Financial Support to MSMEs in ZED Certification Scheme
- A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)
- National Manufacturing Competitiveness Programme (NMCP):
- Credit Linked Capital Subsidy for Technology Upgradation
- Marketing Support/Assistance to MSMEs (Bar Code)
- Lean Manufacturing Competitiveness for MSMEs
- Design Clinic for Design Expertise to MSMEs
- Technology and Quality Upgradation Support to MSMEs
- Entrepreneurial and Managerial Development of SMEs through Incubators
- Enabling Manufacturing Sector to be Competitive through QMS&QTT
- Building Awareness on Intellectual Property Rights (IPR)
- Marketing Promotion Schemes –
- International Cooperation
- Marketing Assistance Scheme
- Procurement and Marketing Support Scheme (P&MS)
- Entrepreneurship and skill Development Programme –
- Entrepreneurship Skill Development Programme (ESDP)
- Assistance to Training Institutions (ATI)
- Micro & Small Enterprises Cluster Development (MSE-CDP)
- Scheme of Surveys, Studies and Policy Research
- National SC-ST-HUB
- Scheme of Information, Education and Communication
Frequently Asked Questions
Is MSME registration updated to Udyam Registration?
Yes, MSME registration, i.e. Udyog Aadhaar Registration has been replaced with Udyam Registration. If any micro, small and medium industries want to start any business, they can obtain the MSME/Udyam Registration. The MSME/Udyam registration is completely online. This registration provides the business with a lot of benefits and subsidies.
Is the MSME registration compulsory?
No. The enterprises that come under the MSME category need not mandatorily apply for MSME registration. However, it is better to obtain MSME/Udyam registration as the government provides a lot of benefits in terms of loan facilities, easy access to credit, low-interest rates, eligibility to many schemes, etc., to the enterprises that have MSME registration.
Is Aadhar card compulsory?
Yes. For obtaining Udyam registration, an Aadhaar card is compulsory. In case an applicant is other than the proprietor, the Aadhaar card of the partner and the director will be required.
Can the existing and new businesses both apply?
Yes, an existing and new business can apply for MSME/Udyam Registration, provided the existing unit is functioning and meets the threshold limits for registration. Enterprises having a UAM Registration need to be re-registered for Udyam registration to avail the benefits provided for the MSMEs.
What is the validity of the MSME registration certificate?
There is no expiry of the Udyam Registration Certificate. As long as the entity is ethical and financially healthy there will be no expiry of the certificate.
Can trading companies register under MSME?
Yes. Earlier, the MSME registration covered only manufacturing and service industries. Trading companies are not covered by the scheme. However, in July 2021, the government announced that the wholesale and retail trade will come under the MSME classification and thus can apply for MSME registration of their wholesale/retail business. The Ministry of Micro, Small and Medium Enterprises decided to include retail and wholesale trade under MSMEs for the purpose of priority sector lending.
Do I need multiple registrations for manufacturing plants in different cities?
No. The MSME/Udyam Registration Certificate is for a single entity irrespective of multiple branches or plants. However, information about multiple branches or plants must be furnished.
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Credit: ClearTax