Structured Biiz

Micro, Small and Medium Enterprises (MSME)

Micro, Small and Medium Enterprises (commonly referred as “MSME”) play a significant role in the economic growth of the country owing to their contribution to production, exports and employment. The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 wherein enterprises have been classified as under:

  • Manufacturing Enterprises – Enterprises engaged in the manufacture or production of goods pertaining to any industry; &
  • Service Enterprises – Enterprises engaged in providing or rendering of services

Eligibility Criteria

As per the provisions of the MSMED Act 2006, an enterprise would qualify to be registered as a Micro or Small or Medium Enterprise only if fulfilled the following criteria:

Classification

Criteria

Micro
Enterprise

Small
Enterprise

Medium
Enterprise

Manufacturing Enterprises

Investment in plant and machinery or equipment (Pls refer Note 1 & 2)

Not more than INR 25 Lakhs

More than INR 25 Lakh but does not exceed Rs 5 Crore

More than INR 5 Crore but does not exceed INR 10 Crore

Service Enterprises

Annual Turnover (Pls refer Note 3)

Not more than INR 5 Crore

More than INR 5 Crore but does not exceed Rs 50 Crore

More than INR 50 crores but does not exceed INR 250 crores

[1] 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 

[2] Investment in equipment is the original cost (excluding the cost of 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)

[3] Annual turnover excludes Export turnover

Benefits to MSME's

By Central Government

By State Government

  • MSME would be granted the “Priority Sector” status thereby making them eligible for definitive borrowings from Scheduled Banks at a preferred rate of interest;
  • It has been prescribed that any person buying goods or availing services from MSMEs would be required to settle the payment within 45 days of time
  • Relief of interest upto 2% would be granted to MSMEs from time to time on the outstanding balance of working capital loans or term loans;
  • Micro and Small Enterprises shall not be charged with any fees for procuring tender documents and would also not have to furnish earnest money;
  • It has been prescribed that Micro and Small Enterprises would be granted collateral free loan upto an amount of INR 2 crores and 85% of such loan amount would be guaranteed by the Credit Guarantee Trust fund; etc.
  • Financial support for collecting seed capital;
  • Grant of subsidy on interest payment;
  • Grant of subsidy on amount of capital investment required to be made;
  • Reimbursement of costs incurred on account of training for skill development of employees;
  • Reimbursement/ concession in the payment of electricity bill, stamp duty, SGST, etc;
  • Support in respect of payment for any quality control audit;
  • One-time grant for the expenses incurred for raising capital through SME Exchange;
  • Reimbursements of costs incurred on employer’s contribution of ESI and PF for generating employment; etc.

In addition to the above benefits, several other benefits have been extended to the MSMEs under the COVID-19 stimulus package by the Government of India. These benefits are aimed at reducing the financial strain that the MSMEs would be suffering from on account of the pandemic situation.

MSME Registration Process

The process of registering an enterprise as an MSME is to be done online on the MSME web portal owned and managed by the Government of India. As a process, typically, for the purpose of seeking MSME registration, an application form is required to be filled up online and prescribed documentation to be uploaded. The general details and documents required for seeking MSME registration are as under:

The process of registering an enterprise as an MSME is to be done online on the MSME web portal owned and managed by the Government of India. As a process, typically, for the purpose of seeking MSME registration, an application form is required to be filled up online and prescribed documentation to be uploaded. The general details and documents required for seeking MSME registration are as under:

  • Basic details (like name, address, type of organization, PAN, etc);
  • Bank account related details;
  • Business activity related details;
  • Details related to investment made in Plant and machinery;
  • Details regarding number of persons employed;
  • Turnover details; etc.

Upon submission of the aforesaid details and documents, the application would be processed and the MSME certificate would be received on email.

Service Offered

Udyog Aadhar / MSME Registration - Rs. 1,999/-

Click here

Inclusive of GST

Other Services Offered

  • Obtaining necessary registrations to claim benefits as an MSME;
  • Identifying and evaluating various Central and State Government level incentives that are available to the MSME sector;
  • Understanding the eligibility criteria and the documentation to be completed, along with any prescribed covenants in order to apply for Covid-19 stimulus financing;​
  • Preparation of checklist of reporting and compliance obligations to be undertaken to retain the MSME status and also for the benefits availed;
  • Evaluating the potential tax (direct and indirect) and regulatory implications of the incentives availed as the Covid-19 stimulus financing; etc.