Ask Our Expert!

Vital Benefits of MSME Registration in India

udyam registration benefits

MSME Registration in India is launched to serve the benefits to the MSME company. 

MSME stands to represent micro, small, and medium enterprises. They are the backbone and engine of economic growth in our country, which promotes equitable development for all. 

The MSMED Act is an Indian government initiative to support and promote MSMEs. It offers various incentives, subsidies, and msme schemes that will help. MSME Udyam Registration is required to be eligible for the MSMED Act benefits from the Central or State Governments and the Banking Sector.

What Are The Benefits Of MSME Registration In India? 

Gazette of India, Ministry of Micro, Small and Medium Enterprises of India (MSME), notified composite criteria that included turnover and investment to classify the enterprises as Micro, Small, and Medium Enterprises in 2020. 

MSMEs would be eligible for permanent Registration, or Udyam Registration, by confirming the new definition of MSMEs.

Salient Features of MSME Registration in India

Anyone can obtain the Udyam Registration. You can register it through the Udyam portal.

Udyam Registration can be done entirely electronically

The applicant doesn't need to upload any documents.

Registration is completely free. There are no fees.

On completion of the msme registration online process, an e-certificate, known as the "Udyam Registration Certificate," will be issued. The UR certificate will include a dynamic QR code that allows you to access details about the company.

Anyone who intentionally misrepresents the Udyam Registration process or the updating MSME registration process in India shall face a penalty under section 27 MSME Act.

The Udayam online platform fully integrates with the Income Tax and Goods and Service Tax ID Number (GSTIN) systems. Details on investments and turnover of companies are automatically taken from government databases.

  • The turnover calculation does not include exports.
  • Registering is a requirement.
  • Registering is only possible with an Aadhar number
  • It is mandatory to have PAN and GST numbers
  • Udyam Registration Benefits
  • It will serve as a primary identification number and permanent Registration for the enterprise.
  • MSME registration is entirely paperless and requires self-declaration.
  • Udyam Registration is permanent and will not need to be renewed.
  • In one Udayam Register, any activity, whether manufacturing, service, or both, can be listed.
  • GeM allows enterprises to register on their portal. This portal addresses issues relating to delays in payments and also provides a way for Udyam Registration. 
  • Benefits of MSME registration from the following schemes offered by the Ministry of MSMEs through the Udyam Registration.
  • Additional protection against delayed payments and Government tenders
  • The Udyam entity is eligible for priority sector lending by Banks.

Priority Sector Lending Benefits for MSME Registration In India

The Reserve Bank of India concern over the Priority Sector Lending (PSL) rules.

The priority sector categories are listed below:

  • Agriculture
  • Micro, small, and medium enterprises
  • Export credit
  • Education
  • Housing
  • Social Infrastructure
  • Renewable energy

Priority Sector Lending applies to the MSME Sector

All MSMEs bank loans conforming to RBI guidelines are eligible for priority sector lending.

Assistance for MSME Registration In India

These are the benefits available to MSME Registration Entity:

MSMEs get Bank Benefits: Since the MSME Registration In India was introduced, banks and financial institutions have made unique plans to support micro, small, and medium-sized businesses. MSMEs can get business loans at a much lower interest rate than regular business loans. This is up to 1.5 percent less than the interest rates on regular business loans.

Excellent Tax Benefits: Business owners may be eligible for the exemption scheme from excise tax depending on their industry. In the early years of their company, they can receive the direct tax exemption.

Benefits of Electricity bills: MSME Registration In India on the Udyam portal will allow you to save money and get concessions on your monthly electricity bill.

Approval of Licenses for Businesses: If registered with Udyam, it is straightforward to apply for MSME registration to receive approval for various registrations or licenses.

Easy Application for Government Tenders by SMEs: MSMEs registered under this Registration can apply to government tenders.

Interest in Overdraft: MSME Registration In India is eligible under the credit guarantee trust funds scheme to receive a discount on OD and an exemption from 1 percent interest. This reduces the loan EMI.

State Government Benefits: The state governments offer subsidies for tax, electricity, and entry into the business sector. They also provide rebates on sales tax and buying preferences for goods they leave.

Benefits of the Central Government: Many schemes have been introduced by the central government to benefit of MSME Registration In India, including Atma Nirbhar Bharat and credit guarantee, Quality management standards and quality technology tools, women entrepreneurs, and zero effect and zero defect.

MSMEs have an international business opportunity: They can participate in trade shows and fairs worldwide, allowing them to showcase their products and services to a broader global audience.

Subsidies for MSMEs: MSMEs are eligible to receive a subsidy through the National Small Industries Corporation (NSIC) and credit ratings.

MSME Registration In India CAN Be A Significant STEP. Why?

Aatmanirbhar Bhat Abhiyan changed The Ministry of Micro, Small, and Medium Enterprises in 2020. The criteria for defining MSMEs were changed to include investment in plant and machine and annual turnover. The distinction between service and manufacturing industries was also eliminated.

Every Small and Medium Business owners can reap the benefits of MSME Registration In India

Banks & The Government Offer Collateral-Free Loans

To provide collateral-free loans to micro and minor sectors, the Credit Guarantee Fund Scheme (CGS) was launched by the Government of India.

In association with the Ministry of Micro, Small and Medium Enterprises and Small Industries Development Bank of India, the Indian government created Credit Guarantee Fund Trust (CGTMSE), which provides credit to small and micro-level businesses.

For small businesses that have suffered losses or debts during covid-19, the finance minister has approved a collateral-free loan of up to 3 lakhs crore.

Reserve Policies for The Manufacturing Sector

The 1951 Development and Regulation Act is crucial for SSI (Small Scale Industries). It provides reservation policies that allow the exclusive manufacturing of certain items.

Exemptions Direct from Income Tax

According to the government scheme, businesses registered under MSME receive a direct exemption from income tax for their first year, depending on their activities. This significantly relieves businesses from the need for detailed bookkeeping and complicated auditing.

Subvention for Bar Code Registration

MSME offers subsidies to businesses that register with MSME for bar code registration. Barcodes can be viewed through computers by being represented as numbers or parallel lines. Barcodes are vital for tracking goods throughout the supply chain and management process in MSME Registration In India.

Assistance Against Delay In Payment

The right of the buyer to delay payment of goods and the right of interest is protected by the Ministry of Micro, Small, and Medium Enterprises. This act focuses on settling disputes through mediation, arbitration, and mediation within a prescribed time frame.

Buyers are responsible for paying dues if the supplier of goods is an enterprise registered under the MSME Act. Payment can be made within 15 days if the date needs to be specified. However, payments must be at most 45 days.

Banks Must Offer Minimum Interest Rates

The interest rate for MSME-sized enterprises is lower. Banks have set targets for micro and small business credit, including 

  • 20% increase in micro and small business credit
  • 10% annual growth of micro and small enterprises bank accounts
  • 60% growth of lending credits to small-scale industries. 

MSME registered company receive loans quickly for their first run on the market.

15% Subsidy For CLCSS

In Msme Registration In India, the Credit Linked CGSTI Subsidy Scheme (CLCSS) is a program of The Ministry of Micro, Small, and Medium Enterprises for the technological advancement of businesses. The government of India launched the scheme in October 2000. It offers a 15% subsidy that can be at most 15 lakhs. The scheme allows loans up to 100 lakhs for subsidy calculation.

The following industries can benefit from CLCSS:

  • Biotech Industry
  • Pharmaceuticals and drugs
  • Common effluent Treatment Plant
  • Food Processing (Ice cream included)
  • Rubber Processing, including vehicle Tyres
  • Intermediates and dyes
  • Industries based on medicinal and aromatic plants
  • Corrugated boxes
  • Extruded and Plastic Molded Products, Parts / Components
  • Poultry Hatchery & Cattle Feed Industry

Concessions in the payment of your electricity bill

If they apply to the electricity department, enterprises with a registered certificate as MSME can get a discount on their electricity bills.

Reimbursement For ISO Certification

MSME registered businesses may be exempt from paying ISO certificate fees if they apply along with the MSME registration certificate to their respective authority. ISO certification is necessary to promote the standards of MSMEs registered enterprises when they bid to increase their performance.

Enjoy 50% Subsidy On Patent Registration

After filing an MSME application, businesses registered with MSME receive a 50% subsidy for patent registration. How do businesses become an MSME in India?

The MSME registration process can be simple and encourages entrepreneurship.

Participants from MSME Registration in India must fill out the one-page form 

The MSME registrants must fill out the application form with the following information:

1. Number of Personal Aadhar

2. Name of your industry

3. The official address of the company

4. Information about bank accounts

After submitting the form, applicants will be issued a Udyam Registration number.

It is sufficient to self-certify the information. No supporting documents are required.

Documents Required For MSME Registration

For MSME Registration In India, please refer to the following documents:

  • Aadhaar card
  • Pan Card
  • Lease agreement
  • Documents about property
  • Cancelled Cheque
  • Company Registration (Sale/Purchase bill)
  • Evidence of Business Address
  • Additional Documents Memorandum of Association
  • Articles of Association (AoA).
  • Copies of Purchase and Sale Bills
  • Partnership Deed
  • Copies of Bills of Machinery and Licenses

To Wrap Now… 

In India, Entrepreneurial culture is in vogue, and Online MSME registration process will accelerate in the next few years. 

Incorporating them with other private or public institutions, the government continues to implement various policies and regulations that support the development of small and micro-scale industries. is the leading platform for MSME Registration in India. So Connect today for more updates.