The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises.
Micro, Small and Medium Enterprises are in small size, as per their investment. They perform a role in the economy by:
• providing employment to a large number of unskilled and semi-skilled people,
• contributing to exports,
• raising manufacturing sector production and
• Extending support to bigger industries by supplying raw material, finished parts & components, etc.
Msme Classification In India
MSME Classification in India is based on the investment in plant & machinery or equipment of the entity
Service sector and manufacturing sector have different thresholds for MSME classifications.
1.) In case where the enterprises engaged in the manufacture or production, processing or preservation of goods:
Classification of the MSME Ceiling limit on Investment in Plant and Machinery (Rs)
Micro Below 25 lakhs
Small 25 lakhs to 5 crores
Medium 5 crores to 10 crores
2.) In case where the Enterprises engaged in providing or rendering of services:
Classification of the MSME Ceiling limit on Investment in Equipments
Micro Below 10 lakhs
Small 10 lakhs to 2 crores
Medium 2 crores to 5 crores
MSME schemes launched by the Government are:
Grievance Monitoring System
Credit Linked Capital Subsidy Scheme
Quality Management Standards & Quality Technology Tools
Zero Defect Zero Effect
Udyog Aadhaar Memorandum
Micro, small and medium enterprises can obtain MSME Registration under the MSMED Act. Though the MSME registration is not statutory, it is beneficial for our business, to sustain the economic growth and increase exports, to g enerate large scale employment and for making the growth inclusive.
Documents Required for MSME Registration
Business Address Proof
Copy of Licenses and Bills of Machinery Purchased
Partnership Deed/ MoA and AoA
Copies of Sale Bill and Purchase Bill
Benefits of MSME Registration
Bank loans become cheaper as the interest rate is very low
Allow credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
get easy access to credit
One Time Settlement Fee for non-paid amounts of MSME
Provide higher preference for government license and certification
cost to getting patent, or the cost to setting up the industry reduces as many rebates and concessions are available
many government tenders are open to the MSME Industries
tax rebates offered to MSME.