Micro, small, and medium enterprises (MSME) play an important part in the development of the Indian economy. The goal of introducing Udyam Registration was to streamline the procedure that business owners had to go through in order to register their company as a Micro Small Medium Enterprise, or MSME. However, Udyog Aadhaar Registration is now being transferred to Udyam Registration.
If you operate a medium, small, or micro-enterprise and haven’t registered it yet, you should know that registering your MSME through Udyam Registration entitles you to a slew of perks.
What is Udyog Aadhaar?
The Udyog Aadhaar Memorandum is the registration form on which the MSME declares its existence and provides required information like as the owner’s Aadhar details, bank account details, and so on. After submitting this form, an acknowledgement form including the applicant’s unique UAN is sent to the applicant’s registered email address (Udyog Aadhaar Number). There is no requirement for supporting paperwork because it is a self-declaration form.
To benefit from Udyog Adhar registration, SSIs or MSMEs must move to Udyam Registration. Otherwise, the enterprises must re-register using the Udyam Registration Portal.
Benefits of Udyog Aadhar for MSME
- Banks offer collateral-free loans.
The Government of India established the Loans Guarantee Fund Scheme for Micro and Small Enterprises (CGS) to provide collateral-free credit to the micro and small enterprise sector. Both current and new businesses are eligible for coverage under the scheme. The Government of India’s Ministry of Micro, Small, and Medium Enterprises, in collaboration with the Small Industries Development Bank of India (SIDBI), established the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to carry out the Credit Guarantee Fund Scheme for Micro and Small Enterprises.
- Policy shifts to the industrial and production sectors
One of the key policy initiatives for promoting this sector has been the reservation of items for exclusive manufacture in the SSI sector, which is statutorily provided for in the Industries (Development and Regulation) Act, 1951.
The Reservation Policy has two goals.
Ensure expanded consumer products manufacturing on a modest scale.
Increase job prospects by establishing small-scale industries.
- It is very simple to obtain approval, licenses, and registrations.
It has made it very simple for firms with an MSME Certificate to get licenses, approvals, and registrations in any field for their business from the relevant authorities, since they may provide the Certificate of MSME Registration when filing an application.
- Special consideration for foreign trade fairs
The International Cooperation Scheme provides financial assistance on a reimbursement basis to State/Central Government organisations, industries/enterprises Associations, registered societies/trusts, and organisations associated with MSME for deputation of MSME business delegation to other countries for exploring new areas of MSMEs, participation by Indian MSMEs in international exhibitions, trade fairs, buyer seller meet, and holding international conferences.
- octroi advantages
The plan of octroi reimbursement granted under the 1993 Package Scheme of Incentives will be included in the new Scheme up to 31-3-2006 on the same pattern. Where an account-based cess or other levy is levied in place of or in addition to octroi, the change is also eligible for refund.
- Stamp duty and registration fees are waived.
IT units in public IT parks are currently exempt from stamp duty and registration costs until March 31, 2006. All new industrial units with MSME registration, as well as expansions, will henceforth be exempt from paying Stamp Duty and Registration fees.
- Exemption from direct taxation
Enterprises with MSME registration can benefit from Direct Tax Exemption in the first year of operation, as specified by the government scheme and based on business activities.
- Subsidy for bar code registration
MSME-registered businesses can take advantage of the scheme’s Bar Code Registration discount.
- NSIC performance and credit ratings are subsidized.
MSME-registered businesses can take advantage of the scheme’s subsidy on NSIC performance and credit ratings.
Eligible for IPS assistance
Enterprises with MSME Registration are eligible for the scheme’s Industrial Promotion Subsidy (IPS).
- Counter Guarantee from the Government of India via CGSTI
Enterprises with MSME Registration are eligible for Counter Guarantee from the Government of India via CGSTI.
- Protection against payment delays
The Ministry of Micro, Small, and Medium Enterprises protects MSME registered businesses against late payments from buyers and the right to interest on late payments through mediation and arbitration, with the goal of resolving disputes in the shortest possible period. If a micro or small enterprise with MSME registration offers goods or services, the customer must pay on or before the date agreed upon between the buyer and the micro or small enterprise. If no payment deadline is specified in the agreement, the buyer must pay within fifteen days of accepting the goods or services. Furthermore, a payment payable to a micro or small firm cannot be delayed for more than 45 days from the date of acceptance or considered acceptance. If the buyer fails to pay on time, the buyer must pay compound interest with monthly interest rests to the supplier on that amount from the agreed date of payment or fifteen days of acceptance of goods or service. The penalty for late payment to an MSME firm is three times the bank rate announced by the Reserve Bank of India.
- Bank interest rates have been reduced.
Interest rates for enterprises with MSME registration are lower than for other enterprises. Certain lending targets for banks to Micro and Small Enterprises have been established. Banks must achieve a 20% increase in credit to micro and small businesses, a 10% increase in the number of micro enterprise accounts, and a 60% increase in overall lending to the micro and small business sector. The banks must do the following:
- Micro and small firms engaged in manufacturing with an investment in plant and machinery of up to Rs.10 lakh and service enterprises with an investment in equipment of up to Rs.4 lakh must get 40% of total advances.
- Twenty percent of the overall advance to micro and small firms should go to manufacturing enterprises with investments in plant and machinery above Rs.10 lakh to Rs.25 lakh, and service enterprises with investments in equipment exceeding Rs.4 lakh.
- To put it simply, tiny companies must receive 60% of advances.
- Purchase with a 15% CLCSS subsidy
The Ministry of Micro, Small, and Medium Enterprises runs a scheme called “Credit Linked CGSTI Subsidy Scheme (CLCSS) for Micro and Small Enterprise Technology Upgradation.” The system was launched in October 2000 and was amended on September 29, 2005. The revamped scheme intends to help Micro and Small Enterprises (MSEs) upgrade their technology by giving a 15% capital subsidy (capped at Rs.15 lakhs) for the purchase of Plant and Machinery. The maximum eligible loan for subsidy computation under the scheme is Rs.100 lakhs. Currently, the Scheme has approved over 1500 well-established/improved innovations across 51 sub-sectors.
- Government security deposit waiver
When applying for Government Tenders, the Ministry of Micro, Small, and Medium Enterprises provides the following benefits to enterprises that have MSME Registration:
1. Free distribution of tender sets
2. Waiver of Earnest Money Payment
3. Waiver of Security Deposit up to the Monetary Limit established at the unit
- Electricity bill reduction
Enterprises with an MSME Registration Certificate can apply for a reduction in their electricity cost by submitting an application to the electrical department together with their MSME Registration Certificate.
- ISO certification reimbursement
Enterprises holding an MSME Registration Certificate can recoup ISO Certificate Expenses by submitting an application to the appropriate authority together with their MSME Registration Certificate.
- Scheme for Excise Exemption
Enterprises with MSME registration can benefit from Excise Exemption in the first year of operation, as specified in the Government’s Excise Exemption scheme and based on business activities.
- Preference in government procurement
MSME-registered businesses enjoy a competitive advantage when bidding on government contracts. When applying for government tenders, MSME Registered organizations are granted preferential consideration.
- Price preference is given a 15% weightage.
MSME-registered businesses can benefit from a 15% price discount. As previously stated, preference
- A 1% reduction in the interest rate on OD
Enterprises with MSME Registration can benefit from a 1% reduction in the interest rate on OD, as specified in the scheme.
- Patent registration is subsidized by 50%.
Enterprises with an MSME Registration Certificate can apply for a 50% subsidy on patent registration by submitting an application to the appropriate authority.
Udyog Aadhar registration, provides small enterprises receive different benefits such as subsidies, tax exemptions, lower-interest loans, loan waivers, entire or partial payment of certain utility bills, and many other advantageous programmes. Register for your Udyog Aadhar Certificate immediately if you own a small business under SSIs or MSMEs.
Phoenixtax one of the best Tax consultants in Chennai helps all small businesses and enterprises with the MSME registration process. Our team will gather all of the necessary information to complete the registration process and assist you in obtaining your Udyog Aadhar Certificate as soon as possible. Visit the website right now for services on MSME registration in Tambaram, Chennai