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MSME Registration Benefits

MSME stands for micro, small, and medium enterprises, which are the backbone of developing economies. To support MSMEs, the Indian government provides various subsidies and incentives through the MSMED Act. To receive benefits from the central/state governments and banking sector under the MSMED Act, MSME registration is required. Registering allows MSMEs to receive benefits like easier loan approval, lower interest rates, tax exemptions, and more.

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44 views2 pages

MSME Registration Benefits

MSME stands for micro, small, and medium enterprises, which are the backbone of developing economies. To support MSMEs, the Indian government provides various subsidies and incentives through the MSMED Act. To receive benefits from the central/state governments and banking sector under the MSMED Act, MSME registration is required. Registering allows MSMEs to receive benefits like easier loan approval, lower interest rates, tax exemptions, and more.

Uploaded by

rama
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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MSME Registration Benefits

MSME stands for micro, small and medium enterprises, and these are the backbone of any
developing economy. To support and promote MSMEs, the Government of India through
various subsidies, schemes and incentives promote MSMEs through the MSMED Act. To
avail the benefits under the MSMED Act from Central or State Government and the Banking
Sector, MSME Registration is required.

MSME Registration
MSME stands for micro, small and medium enterprises and any enterprise that falls under
any of these three categories. MSME enterprises are the backbone of any economy and are an
engine of economic growth, promoting equitable development for all. MSME Enterprises are
typically more labour intensive than large corporates and provide tremendous employment
potential at a very low capital cost. MSME also share a major portion of industrial production
and exports in India and play a pivotal role in the development of industrial economy.
Therefore, to promote and develop MSMEs; the MSMED Act of India facilitates promotion
and development of enterprises through many incentives, schemes and subsidies. To obtain
the benefits under MSMED Act, MSME Registration is a must and proprietorship
firms, partnership firms, LLPs, Private Limited Company’s and Public Limited
Companies can register.
BENEFITS OF MSME REGISTRATION
The MSME registration is not statutory. However, the MSME registration process in India
has been conceptualized to provide maximum benefits to all types of enterprises. After
registration, any enterprise becomes qualified to reap the benefits offered under the MSMED
Act. Some of the benefits from Central Government include easy sanction of bank
loans (Priority sector lending), lower rates of interest, excise exemption scheme, exemption
under Direct Tax Laws and statutory support such as reservation and the interest on Delayed
Payments Act.
State Government and Union Territories also have complied their own package of facilities
and incentives for MSMEs. Some of the benefits provided by State Govenement for MSMEs
include development of specialized industrial estates, tax subsidies, power tariff subsidies,
capital investment subsidies and other support. Both the Centre and the State, whether under
law or otherwise, target their incentives and support packages generally to units registered
with them.
Banking Laws, Excise Law and the Direct Taxes Law have incorporated the word MSME in
their exemption notifications. Therefore, the registration certificate issued by the registering
authority is seen as proof of being MSME and is required to avail the benefits sanctioned for
MSMEs.
MSME Definition
For Enterprises engaged in the manufacture or production, processing or preservation of goods, the
definition is as follows:

 Micro Enterprise: An enterprise where investment in plant and machinery does not exceed Rs. 25
lakh.
 Small Enterprise: An enterprise where the investment in plant and machinery is more than Rs. 25
lakh but does not exceed Rs. 5 crore.
 Medium Enterprise: An enterprise where the investment in plant and machinery is more than Rs.5
crore but does not exceed Rs.10 crore.

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