Key aspects of MSME
                                                                         Dated: May 25, 2020
                                                                                                         Editorial No. 01

1.      MSME and governance:-

·        MSME refers to Micro, Small and Medium Enterprises.

·        Micro Small and Medium Enterprises (MSMEs) are crucial for the economic growth and stability of any country and play a vital role especially for developing countries as they facilitate economic activity and provide employment thus contributing to poverty reduction

·        In India, it is governed under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.

·        The Ministry of Micro, Small and Medium Enterprises, a branch of the Government of India, is the apex executive body for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India.

2.      Classification:-

·        Presently MSMEs are classified on the basis of Investment in plant and machinery and are available for Manufacturing sector and Service sector (Refer Para 4).

·        As a part of announcement by the Finance Minister for Indian economy’s fight against COVID-19 the revised classification would be based on Investment in Plant and Machinery along with annual turnover and difference between manufacturing sector and service sector has been disposed off.

Existing criteria of classification- Based on Investment in Plant and Machinery:-

New criteria of classification- Based on Investment and annual turnover

3.      Who can apply:-

·        Proprietorship firm

·        Partnership firm

·        Company

·        LLP

·        HUF

·        Clubs

·        Society/Co-operative society

·        Trust

·        Association of person (AOP)

·        Or any other undertaking.

4.      Activities not allowed for MSME registration:-

5.      Registration:-

·        Registration of an MSME is not legally mandatory but registering it will help you for various benefits discussed in next para.

·        Any enterprise can Registered as MSME through:- udyogaadhaar.gov.in

·        No fees for filing application

·        Get Instant registration certificate (If Mobile number updated in Aadhaar card) Otherwise, within 24 Hours (Government Id proof needs to be attached with application)

·        No compliances after registration

·        No online mechanism for cancellation of registration. Offline procedure through Udyog Aadhaar Centre.

6.      Benefits of registration:-

·        Collateral free loans from banks

·        Protection for delay in payments

·        Concession on electricity bills

·        Getting government tenders

·        Financing/discounting of trade receivables through TReDS

·        Interest equalization benefit to exporters

·        Overdraft Interest rate exemption

·        Eligible for Industrial Promotion subsidy

·        50% subsidy on Patent registration

·        Credit facility

·        Reimbursement of ISO certification charges

·        Credit rating fees support

·        Benefits in Income Tax like Presumptive taxation, Reduced Corporate tax rate, Audit limit requirement to 5 crore from 1 crore, Removal of dividend distribution tax etc.

·        Benefits under GST like Simplified return, Quarterly filing of returns, Not to quote HSN code or quote at lower digits etc.

·        And Many more

7.      Information required for registration:-

·        Aadhaar number of Proprietor/Partner/Directors

·        PAN number of Business

·        Address of Business

·        Caste and Gender

·        Investment in plant and machinery

·        No. of person engaged in business

·        Activity carried out by business (Manufacturing/Service)

·        Date of commencement of business

·        IFSC code and bank account number

·        Email and Mobile number

8.      Website for Loan to MSME:- www.udyamimitra.in

Disclaimer:

This article is for informational purposes only, but not promised or guaranteed, to be correct, complete, and up-to-date and hereby disclaims any and all liability to any person for any loss or damage caused by errors or omissions, whether such errors or omissions result from negligence, accident or any other cause.

About Author:

CA Sandeep Bansal, is a practising Chartered Accountant based out of Delhi and is an associate member of the Institute of Chartered Accountants of India since 2015.Possesses sound professional experience for approx. 5 years in the field of Income tax, GST, Auditing, Company law etc. He keens to gain expertise over different areas and ensure to keep himself updated.