Top 10 key Benefits of Registration under MSME in India
Benefit 1: Subsidy on Patent Registration
Under the current laws, MSMEs registered with the MSME ministry stand to benefit from a 50% subsidy on their patent registration fees. This encourages small businesses and firms to keep innovating and working on new projects and technologies.
Benefit 2: Protection against Payments (Delayed Payments)
MSMEs constantly face the risk of delayed payments which in turn disturbs their entire business. In order to protect registered companies, the Supreme Court has mandated that any buyer of goods or services from registered MSMEs is required to 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 delays 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.
Benefit 3: ISO Certification Charges Reimbursement
Any registered micro, small and medium enterprise can claim reimbursement of the expenses that were made in order to obtain an ISO certification. This motivates entrepreneurs to get their respective businesses ISO certified which helps them to do business abroad in terms of high-quality exports.
Benefit 4: Overdraft Interest Rate Exemption
Businesses and enterprises registered as MSMEs can avail a benefit of 1% on the Overdraft in a scheme that differs from bank to bank. This helps to make small businesses secure during unfavorable markets.
Benefit 5: Fewer Electricity Bills
All companies that have the MSME Registration Certificate are entitled to concessions on their electric bill. This enables businesses to boost production and take in more orders without worrying about capital expenditure on costs like electricity and maintenance. micro, small and medium enterprises can avail of the concession by providing an application to the department of electricity along with the certificate of registration.
Benefit 6: Bank Loans (Collateral Free)
The Government of India has made collateral-free credit available to all small and micro-business sectors. This initiative guarantees funds to micro and small sector enterprises. Under this scheme, both the old as well as the new enterprises can claim the benefits. A trust named 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 to make sure this scheme is implemented (Credit Guarantee Scheme) for all Micro and Small Enterprises
Benefit 7: Subsidy on Patent Registration
Under the current laws, MSMEs registered with the MSME ministry stand to benefit from a 50% subsidy on their patent registration fees. This encourages small businesses and firms to keep innovating and working on new projects and technologies. The subsidy can be availed by submitting an application to the respective ministries.
Benefit 8: 15% subsidy of CLCSS
Credit Linked CGSTI Subsidy Scheme (CLCSS) is a scheme of The Ministry of Micro, Small, Medium Enterprises (MSME) for technological upgradation of the businesses. The government of India launched the scheme in October-2000, and it offers a 15% subsidy which cannot go beyond 15 lakhs.
Benefit 9: Minimum interest rates of banks
An interest rate is lower for the enterprises under MSME. The targets of banks include a 20% hike in credit to micro and small businesses, 10% annual growth in bank accounts of micro, and small enterprises and 60% growth in lending credits to the small scale industries. Enterprises registered under MSME benefit from quick granting of loans for their initial run in the market.
Benefit 10: Direct exemptions on Income tax
As mentioned in the government scheme, the businesses registered under MSME get a direct exemption of income tax for the first year of business, depending on its activities. It offers a major relief for enterprises from detailed bookkeeping habits and complex auditing processes.