MSMI Registration and Benifits

What are Micro, Small and Medium Enterprise?

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 are killing the urge to grow as they are unable to scale their businesses further. Also, there has 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 has been removed. This removal will create parity between the sectors. The following is the revised MSME classification*, where the investment and annual turnover, both are to be considered for deciding an MSME.

Revised MSME Classification
Criteria	Micro	Small	Medium*
Investment         &  Annual Turnover	< Rs.1 crore  &   < Rs.5 crore	< Rs.10 crore & < Rs.50 crore	< Rs.50 crore & < Rs.250 crore

* Further upward revision made by the government

Benefits of MSME Registration

Due to the MSME registration, the bank loans become cheaper as the interest rate is very low at around ~ 1 to 1.5%. Much lower than interest on regular loans.
There are various tax rebates offered to MSME.

1. It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
2. There are many government tenders which are only open to the MSME Industries.
3. They get easy access to credit.
4. Once registered the cost getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available.
5. Business registered under MSME are given higher preference for government license and certification.
6. There is a One Time Settlement Fee for non-paid amounts of MSME