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 of the benefits under the MSMED Act from the Central or State Government and the Banking Sector, MSME Registration is required.
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 labor-intensive than large corporates and provide tremendous employment potential at a very low capital cost. MSME also shares a major portion of industrial production and exports in India and plays a pivotal role in the development of the industrial economy. So here in this article let us understand the importance of MSME registration.
Importance of MSME Registration
- Collateral Free loans from banks
The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) was launched by the GOI to make available collateral-free credit to the micro and small enterprise sector. Both the existing and the new enterprises are eligible to be covered under the scheme. The Ministry of Micro, Small and Medium Enterprises, Government of India and Small Industries Development Bank of India (SIDBI), established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement the Credit Guarantee Fund Scheme for Micro and Small Enterprises.
- 50% subsidy on Trademark registration
Enterprises that have MSME Registration Certificate can avail 50% subsidy for Trademark registration by making an application to the respective ministry.
- Exemption on the interest rate on overdraft
Enterprises that have MSME Registration can avail the benefit of a 1% exemption on the interest rate on OD as mentioned in the scheme.
- Concession in payment of electricity bills
Enterprises that have MSME Registration Certificate can avail Concession on electricity bill by making an application to the electricity department along with MSME Registration Certificate.
- Tax benefits
Depending on your business, you may enjoy an excise exemption scheme as well as exemption from certain direct taxes in the initial years of your business.
Some of the benefits from the Central Government include easy sanction of bank loans (Priority sector lending), lower rates of interest, excise exemption scheme, the exemption under Direct Tax Laws and statutory support such as reservation and the Interest on Delayed Payments Act.
Here in this article, we have understood the importance of MSME, it will be surely useful for you to grow your business. If you’re wondering to get MSME registration online then you should visit the MSME registration portal and complete the MSME registration process in bliss.
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