The Benefits Of MSMEs Registration - The God In Small Things

The Importance Of Small Scale Industries  

As per a famous English poem, it is the small drops of water that come together to make the mighty ocean and it is the tiny seconds that club together to create the massive ages and aeons. Thus, the importance of small things need not be overemphasized.  If we see the structural and functional units of the national or social economy, then it is the small-scale industries that play the role of small things.  So, the micro, small and medium scale industries are individually small but collectively they exert a huge influence. 

You may also read Recent Budgets And The Growing Importance Of MSMEs.

 The Supportive Features Accorded To The MSMEs 

And in the Indian nation (like various other nation states on this globe), various protective and encouraging (socio-) economic features have been accorded to the Micro, Small and Medium Enterprises (MSEM). The fundamental premise on which this supportive feature is provisioned is that these MSMEs represent actions and efforts of individuals (and groups of individuals), so they need to be guarded against vulnerable situations put up by large commercial & business groups, due to the superiority inherent in the nature of the big-small relationships.

In order to help MSMEs, the government of India introduced the MSME (Amendment) Bill Of 2018 and re-emphasized on the MSME ACT of 2006. Under these legislations, there would be no need for frequent inspections to check the required investments needed to be made in the plant and machinery needed. In addition, the operations of MSMEs would be allowed to continue in a transparent, non-discriminatory, and objective manner.

Some of the other added benefits of getting your MSME registered under the provisions of these laws are summarised in the section below.

In order to help MSMEs, the government of India introduced the MSME (Amendment) Bill Of 2018 and re-emphasized on the MSME ACT of 2006. Under these legislations, there would be no need for frequent inspections to check the required investments needed to be made in the plant and machinery needed. In addition, the operations of MSMEs would be allowed to continue in a transparent, non-discriminatory, and objective manner.

Some of the other added benefits of getting your MSME registered under the provisions of these laws are summarised in the section below.

Also read The MSMED Act, 2006 And Its Amendment In 2018.

1. The Collateral Fee Free Business Loan
The Indian Government has made collateral-free credit available to all small and micro-business sectors. This provision guarantees funds to micro and small sector enterprises. Herein, both the old as well as the new enterprises are eligible to claim the benefits. A trust known as The Credit Guarantee Trust Fund Scheme was introduced by the Government Of India, SIDBI (Small Industries Development Bank Of India) and the Ministry of Micro, Small and Medium Enterprise ensure this scheme is implemented (Credit Guarantee Scheme) for all Micro and Small Enterprises.

 2. The Gift Of Subsidy On Patent Registration
As per the present laws, MSMEs registered with the MSME ministry can benefit from a 50% subsidy on their patent registration fees. This law supports small businesses and firms to keep innovating and working on new & different projects and technologies. The subsidy can be taken by submitting an application to the respective ministries of the Indian government.

3. The Benefit Of Exemption In Overdraft Interest Rate 
Businesses, commercial groups  and enterprises registered as MSMEs are entitled to a benefit of 1% on the OverDraft in a scheme that differs from bank to bank. This makes small businesses and enterprises secure during unfavorable markets.

4.  The Benefit Of Industrial Promotion Subsidy Eligibility
Businesses that have been registered as MSMEs are eligible for subsidies for Industrial Promotion as provided by the Government.

 5. The Benefit Of Delayed Payment
MSMEs frequently face the possibility of delayed payments which in turn disturbs their entire business. In an effort to protect registered companies, the Supreme Court has decreed that any buyer of goods or services from registered MSMEs should make the payment on or before the agreed date of payment or within 15 days from the day they had accepted the goods or services. If the buyer postpones the payment for more than 45 days after accepting the products or services then the buyer has to pay interest on the amount that was agreed to be paid. The interest rate is three times the rate that is notified by the Reserve Bank of India.

6. Benefits On Electricity Costs
All companies which own the MSME Registration Certificate get concessions on their electric bills. This ensures businesses to increase production and accept more orders without considering the possibility of capital expenditure on costs like electricity and maintenance. Micro, small and medium enterprises can avail of the concession by sending an application to the department of electricity along with the certificate of registration.

Do read Know About The Annual Compliance Filings For LLPs. 

7. Reimbursement In ISO Certification Charges
Any registered micro, small and medium enterprise is entitled to claim reimbursement of the expenses that were made in order to obtain an ISO certification. This encourages entrepreneurs to get their respective businesses ISO certified which helps them to do business abroad in terms of high-quality exports.