In India, MSME was introduced in the year 2006. Actually, there were still some service sectors, that were not yet included in this sector but was included in the definition of the Micro, Small and Medium-sized Enterprises making a historic change to this Act. Hence, leveraging the scope of the sector even now the government simplified the MSME Registration online with the paperless work.
The benefits of MSME registration include priority sector lending, power tariff subsidies, capital investment subsidies and excise and direct tax exemptions. Following are the conditions which need to be fulfilled to qualify under MSME Act.
There are 3 types of MSME or SSIs which can be classified as under:
Micro-enterprises are the smallest entities, of course. The investment under Micro manufacturing enterprises should be less than Rs. 25 lakhs in plant and machinery, whereas, the micro service enterprises should not exceed Rs. 10 lakhs investment.
In small manufacturing enterprises, the investment should be in between Rs. 25 lakh and Rs. 5 crores in plant and machinery, while in small service enterprises this investment limits between Rs. 10 lakh and Rs. 2 crores.
And if we’ll talk about the Medium manufacturing enterprises, then the investment should be in between Rs. 5 crore and Rs. 10 crores in plant and machinery, and for small service enterprises it should be in between Rs. 2 crore and Rs. 5 crores.
There are multiple benefits of MSME registration for small businesses: