Benefits of MSME Registration

Getting an MSME Registration provides several tax benefits, excise exemptions, benefits from central and state government, reservation in delayed payment act and several other schemes which can be availed through the MSMED Act.

MSME Certificate aims at the promotion and development of micro, small and medium enterprises and classifies the enterprise into different categories depending on their investment.

Tax Benefits

  • The Corporate Tax has been reduced to 5% (instead of 30%, it is 25% now). This is available for those companies which have a turnover of 50 Crore.
  • The timeframe for the minimum alternative tax is increased by 15 years.
  • The presumptive tax has been reduced by 2% for companies which have a turnover of Rs.2 Crore.

Bank Schemes

MSME holders are offered easy loans with a lower rate of interest applicable for all public and private sector banks. They also give preference if there is any delay in making the payment.

Enterprises with MSME Certificate have a benefit of 1% exemption on the interest rate on Overdraft.

Note: Many benefits of MSME Registration depend upon the category under which it is registered.

Excise Exemption

The Government of India has exempted payment of the excise duty for MSME holders whose value of turnover did not exceed Rs. 1.5 Crore on the first day in the financial year.

However; the benefit of excise exemption is only for those goods which are sold or purchased under the brand name of its manufacturer.

For example – Excise Duty of 10% is levied on ready-made and Made-up articles for MSME holders.

Note: After GST came into being, the limit is decreased to Rs 20 Lakh and Rs. 10 Lakh in the Special Category States.

Concessions on Intellectual Property

MSME holders or Start-ups can get a refund of up to 80% from the Government on the patent application. The government also grants a sanction of Rs. 2 Lakh for filing an International Patent application. 

The individual/company gets a rebate of 50% on trademark filing if they possess an MSME Certificate.  

Note: National Patent Application is provided with one-time support of up to Rs. 25,000.

Benefits from State Government

Most of the states offer different schemes or services to promote small businesses. Exemption of Sales tax, credit facilities, developed sites for warehouse construction, hire/purchase of machinery and electricity bill concession.

Benefits from Central Government

To support MSME holders, the Central Government of India has announced different schemes to provide credit support to them. 

Credit Guarantee Scheme

A trust named Credit Guarantee Fund Trust for Micro and Small Enterprise (CGTMSE) is established for individuals to provide a collateral free loan of up to Rs. 50 Lakhs. This scheme also includes –

  • The one-time availability for loans in North-eastern regions is reduced from 1.5% to 0.75%.
  • Promoting women entrepreneurship.
  • Loans of up to Rs. 5 Lakhs for micro-enterprises.
  • The guarantee cover is increased from 75% to 80%.
  • The rate of subsidy for MSME is 15%.
  • The upper limit of the loan provided is Rs. 1 Crore.

ISO 9000/ISO 14001 Certification Reimbursement Scheme

This scheme provides an incentive to all those small scale business/industries that have ISO 9000/ISO 14001/HACCP certifications. These incentives are meant for technological up-gradation, quality and environment management.

Almost 75% of the acquiring charges (certifications) are refunded which subject to a maximum of Rs. 75,000 in each case.

Micro & Small Enterprises Cluster Development Programme (MSE-CDP)

This scheme focuses on enhancing productivity and improving the availability of different services to medium and small enterprises. The assistance is provided on

  • Infrastructure Development (Government Contribution 60%)
  • Diagnostic Study (Maximum cost Rs.2.50 Lakh)
  • Soft Intervention (Government Contribution 75%)
  • Setting Common Facility Centre (Government Contribution 70%)

A separate council Micro and Small Enterprises Facilitation Council is established for timely resolution of disputes with the customers.