Micro, Small, and Medium Enterprises (MSME)

Welcome to Sadiqe and Ameen Associates, your trusted partner in navigating the complex world of taxation for Micro, Small, and Medium Enterprises (MSMEs). With years of expertise and a dedicated team of tax professionals, we are committed to providing comprehensive taxation services tailored to the unique needs of your business.

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    What is MSME?

    MSME stands for Micro, Small, and Medium Enterprises. The classification of enterprises is based on the Micro, Small, and Medium Enterprises Development (MSMED) Act of 2006, which groups them into two categories.

    1. Manufacturing enterprises – involved in producing goods in any industry.
    2. Service enterprises – engaged in providing various services.

    MSME registration in India refers to the process by which Micro, Small, and Medium Enterprises can officially register themselves with the government to avail various benefits and support.

    The MSME registration form is filled by businesses to register under the MSME category. It gathers business details, ownership, finances, and other relevant information.

    Features of MSMEs :

    MSMEs play a vital role in facilitating access to both domestic and export markets for businesses.

    They support product development, design innovation, intervention, and packaging aspects of a business.

    These enterprises generate employment opportunities and provide loans to support their operations.

    MSMEs collaborate with various banks in the country to access credit limits and funding support.

    What is MSME Classification?

    When the government first introduced MSME registration in 2006, it was based on the investment made in plant, machinery, or equipment. However, later on, the government revised the MSME classification by incorporating both annual investment and annual turnover as criteria. Additionally, the distinction between manufacturing and service sectors under the MSME definition was eliminated.

    The current revised MSME classification considers both investment and annual turnover:

    Revised MSME Classification

    CRITERIA MICRO SMALL MEDIUM
    INVESTMENR AND ANNUAL TURNOVER < Rs.1 crore & < Rs.5 crore < Rs.10 crore & < Rs.50 crore < Rs.50 crore & < Rs.250 crore

    What Are The Different Types of MSMEs?

    THERE ARE 3 TYPES OF MSME OR SSIS WHICH CAN BE CLASSIFIED AS UNDER:

    Micro Enterprises

    Micro-enterprises are the tiniest entities, with minimal investment requirements. For Micro manufacturing enterprises, the investment in plant and machinery should be less than Rs. 25 lakhs, while for microservice enterprises, the investment should not exceed Rs. 10 lakhs.

    SmallEnterprises

    Small manufacturing enterprises fall within the investment range of Rs. 25 lakh and Rs. 5 crores in plant and machinery. On the other hand, small service enterprises have an investment limit between Rs. 10 lakh and Rs. 2 crores.

    Medium Enterprises

    When it comes to Medium manufacturing enterprises, the investment should fall between Rs. 5 crore and Rs. 10 crores in plant and machinery. For medium service enterprises, the investment range is between Rs. 2 crore and Rs. 5 crores.

    Udyog Aadhar Registration

    Udyog Aadhar Registration is a simplified registration form for MSMEs. This form allows you to self-certify various details including your entity’s existence, bank information, the Aadhar details of the owner/promoter, and other necessary information. Notably, there are no charges associated with submitting the Udyog Aadhar Registration.

    Documents required for Udyog Aadhar Registration

    Personal Aadhaar number.

    Name of owner

    Category of applicant

    Name of business

    Type of organisation

    Bank details

    Key activity

    National Industrial Classification code

    Details for District Identity Centre (DIC)

    Date of commencement

    MSME Udyam Registration

    In India, the Ministry of Micro, Small and Medium Enterprises (MSME) has initiated a new online registration procedure called Udyam registration. MSME online registration is to promote digitalization and enhance efficiency.

    While MSME Udyam registration is not obligatory, it is highly recommended for small and medium enterprises due to the array of benefits it offers. MSME online registration have several advantages include access to lower interest rates, tax subsidies, capital investment support, and various other forms of government assistance. MSME certificate can boost the growth and development of businesses in this vital sector.

    The MSME Certificate serves as evidence of your registration as a small-scale business in India. Now, the government has further simplified the process by offering MSME Registration online.

    The advantages of MSME Udyam registration are numerous and include priority sector lending, power tariff subsidies, capital investment support, and exemptions from excise and direct taxes.

    To qualify under the MSME Act, certain conditions must be met:

    1. Manufacturing enterprises that have invested less than 10 crores in machinery and plant are eligible for MSME registration.
    2. For service enterprises, the investment in plant and machinery should not exceed 5 crores.
    3. If your enterprise surpasses the maximum limit in the near future, it will no longer qualify as an MSME.

    How to Apply for Udyam Registration Online

    Udyam registration online is a simple process:

    Step 1: Visit the Udyam Registration portal
    Step 2:Click on the “Udyam registration” tab.
    Step 3: Enter the required details, including the name of the business, Aadhaar number, PAN number, and other relevant information.
    Step 4: Upload the relevant documents.
    Step 5: Submit the application
    Step 6: Make the required payment.

    MSME Registration Eligibility

    MSME registration is open to all entities falling under the Micro, Small, and Medium enterprises category according to the MSME classification. However, individual applicants cannot apply for Udyam registration. Entities like proprietorships, partnership firms, companies, trusts, or societies with an investment below Rs. 50 crore and an annual turnover below Rs. 250 crore are eligible for MSME registration.

    There are no MSME registration feesand there’s no need for document verification. The Udyam Registration Portal automatically retrieves PAN and GST-related information about investments and turnovers from government databases, as the portal is connected with the Income Tax and GSTIN systems.

    Benefits of MSME Registration

    MSME registration offers a range of advantages to businesses in India. Here are the MSME registrationbenefits:

    Low-interest Bank Loans:

    MSMEs enjoy access to bank loans at significantly lower interest rates, usually around 1-1.5%, which is much lower than regular loan rates.

    Extended MAT Credit:

    Minimum Alternate Tax (MAT) credit can be carried forward for up to 15 years, compared to the previous limit of 10 years.

    Cost Savings:

    Registered MSMEs receive rebates and concessions, reducing the cost of processes like patent filings and industry setup.

    Government Tenders:

    MSME registration provides easy access to government tenders through integration with Government e-Marketplace and State Government portals.

    One Time Settlement Fee:

    MSMEs can benefit from a One Time Settlement Fee for any non-paid amounts.

    Priority Sector Lending:

    Banks prioritize lending to MSMEs, facilitating their access to credit.

    Security Deposit Waiver:

    MSMEs can enjoy a waiver on government security deposits, aiding their participation in e-tenders.

    Diverse Activities:

    One MSME registration can include multiple activities, be it services, manufacturing, or both.

    Subsidies and Concessions:

    MSMEs may be eligible for subsidies on barcode registration, ISO certification fees, and concessions on electricity bills.

    Special Consideration in Trade Fairs:

    MSMEs receive special consideration in International trade fairs, providing them with enhanced visibility and networking opportunities.

    Government Scheme Benefits:

    MSMEs can avail themselves of various government schemes such as the Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Public Procurement Policy, and Protection against delayed payments.

    By obtaining MSME online registration, businesses can unlock a number of benefits, paving the way for growth and success in the competitive market.

    How Sadique and Ameen Associates can assist with MSME Registration?

    Sadique and Ameen Associates provides a simple and efficient process for entrepreneurs to obtain MSMERegistration and GST registration in just four steps:

    Step 1: Purchase of Plan

    Start by purchasing the plan, and our expert will be assigned to you to handle the entire GST and MSME registration process.

    Step 2: Upload Documents to Vault

    Upload the required documents to our secure vault, which includes:

    • PAN card
    • Aadhaar card
    • Proof of business registration or Incorporation certificate
    • Address proof of the place of business
    • Identity and address proof of promoters/directors
    • Bank account statement/cancelled cheque
    • Digital signature
    • Letter of authorization/Board resolution for authorized signatory
    • No objection certificate from the property owner

    Our experts will carefully verify the documents uploaded by you.

    Step 3: Filing GST Registration Form

    Our experts will submit the GST registration form on the GST portal and provide you with the ARN Number for future reference. Within 3-5 working days, subject to government approval, you will receive the GSTIN.

    Step 4: Filing MSME Registration

    Once the GSTIN is received, our experts will initiate the MSME registration process. In just 2-5 working days, you will receive the MSME Registration Certificate for your entity.

    With Sadique and Ameen Associates’ seamless assistance, obtaining both MSME and GST registration has never been easier. Let our experts handle the complexities while you focus on growing your business!

    Consequences of not filing MSME

    Section 405(4) which includes non-furnishing/incomplete/incorrect information penalty states a fine of up to Rs.25000 (Co.,), Rs.25000/- (Min) & Rs.3 lacs (max) and imprisonment of 6 months for directors or both. Therefore, it is mandatory for directors to file the MSME form 1.

    At Sadiqe and Ameen Associates, we understand the importance of smooth and error-free taxation for the growth of your MSME. Our team is dedicated to providing personalized solutions, ensuring seamless compliance, and maximizing tax savings. With our expert guidance, you can navigate the complex Udyam registration process with ease, freeing up valuable resources to focus on expanding your business.

    Embrace our services to unlock the full potential of your MSME. Contact us today, and let us be your trusted partner on your journey to financial success and prosperity. Together, we will pave the way for a brighter future for your business.

    FAQ

    What is an MSME Registration Certificate?
    The Ministry of MSME in India issues an e-certificate called the Udyam registration certificate to MSMEs. This certificate serves as the MSME registration certificate and is granted to entrepreneurs upon successfully completing the MSME registration process.
    What is the validity of the MSME Registration Certificate/Udyam Registration certificate?
    The Udyam/MSME Registration Certificate does not have an expiry date. As long as the entity maintains ethical practices and remains financially sound, the certificate will remain valid indefinitely.

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