What are the advantages of having MSME certification in India?

MSMEs (Micro, small, and medium-scale enterprises) are business entities where investment starts from less than or up to INR 1 crore and turnover does not exceed more than INR 250 crore. If you own an MSME firm or plan to start one in the future, make sure to register your firm at the Udyam Registration portal to avail the various advantages associated with it.

MSME registration of the company opens new doors of opportunities and perks that you have been waiting for. In the coming few minutes, we’ll be discussing and analyzing the beneficial output associated with MSME certification and how you can take aid from those conveniences.

Top reasons to have MSME certification in India!

The government of India introduced the MSME amendment bill in 2018, which has made things a bit easier for MSME firms to operate and grow. Some of the known benefits associated with MSME certification are:

Patent registration at a subsidized rate

Registered MSME companies that want to register for a patent can easily avail a subsidy of 50%, according to current laws and norms. This subsidy boosts and enhances the spirit of small and medium-scale entrepreneurs in terms of innovation, new projects, and adoption of new technologies. Submit an application to the appropriate ministry to avail the grant.

Collateral-free bank loans

The government of India has enabled the scheme of unsecured funding to small and micro-business enterprises. This initiative assures funding to both old and new micro and small business entrepreneurs. The credit guarantee scheme was initiated by a government authority, SIDBI (Small Industries Development Bank of India), and the Ministry of Micro, Small, and Medium Enterprises to make sure that services are being availed to all micro and small businesses.

A lesser rate of interest from banks

MSME-certified businesses benefit from banks in terms of interest rates. Generally, banks and other financial institutions charge a comparatively lower rate of interest from MSMEs than other business entities. Since the majority of loan seekers from banks are MSME companies, the number will rise in the upcoming times. The Udyam registration certificates avail you of the opportunity of direct tax exemption in the beginning years.

Easy license approval

Once the business entity gets registered at the Udyam registration portal and obtains its certificate along with the registration number, it becomes very convenient for the entity to register itself and attain the approval of various other licenses.

Interest in Overdraft

MSMEs are eligible to get registered in a credit guarantee trust fund scheme and can avail of the benefit of OD with the exemption of one percent interest. It is effective in the reduction of loan EMI amount.

ISO certification

MSME entities that obtain their ISO certification will get exempted from the fee charged. Authorities will not charge a single penny from the registered firm. In order to take advantage of this, submit an application to the concerned authority along with the certificate.

State and Central government benefits

The state government provides electricity and water at subsidized rates, and rebates in sales tax. On the other hand, the central government has schemes like AatmaNirbhar Bharat, a Credit guarantee fund scheme, quality management standard, special loan facilities for women entrepreneurs, and many others.

CLCSS Scheme

The Ministry of Micro, Small, and Medium Enterprises runs a scheme called the Credit-Linked CGTSI Subsidy Scheme (CLCSS). This scheme aims to help MSME entrepreneurs in acquiring new technological advancements and skills, and also in producing products according to international standardized quality. The subsidy offered is 15% on capital (up to INR 15 lakhs), and the loan amount eligibility under this scheme is a maximum of INR 100 lakhs. More than 1500 proven new technologies have been registered under this scheme.

Government-established initiatives and policies regarding MSME development!

Indian government along with the Ministry of Micro, Small and Medium Enterprises have made various policies that help entities to develop in every possible way. Some of the related schemes are

Closing Statements

MSME firms play a significant role in shaping the Indian economy, with nearly 630 million registered MSME enterprises contributing 30% to the country’s GDP. There are huge benefits associated with MSME registration. A certified MSME is open to new opportunities and various other conveniences like facilities for funds at a subsidized rate, collateral-free bank loans, easy licensing, and other state and central government benefits. Hence, if you are qualified for an MSME corporation, it is necessary to register and become a certified one to ensure genuine and reasonable growth. Also, don’t forget to consider government-enabled schemes for extended benefits.

FAQs

What is the purpose of an MSME certificate?

The certificate proves that the entity is a registered small-scale business in India and is eligible for all associated government benefits.

Does MSME registration cost money?

MSME registration is provided free of cost in India, and Udyam registration doesn’t charge any money for certification.

Is the MSME registration number permanent?

After the successful registration of the entity, a unique number called the Udyam registration number (URN) will be generated and is permanent.

Is GST exempted from MSME registration?

No, it is not mandatory to have GST registration while registering for MSME.

How long is MSME certification valid?

MSME/Udyam registration certificate has no expiry date and is valid for a lifetime.