Benefits of UDYAM Registration - Tax Rupees
MSME (micro, small and medium enterprises) term was introduced by the government of India, under the micro, small and medium enterprises development (MSMED) act of 2006. MSME sector is considered as backbone of the Indian Economy as it contributes significantly towards country’s GDP, exports and plays a crucial role in generating large scale employment opportunities for rural areas.
MSMES also contribute immensely to the country’s socio-economic development. To boost and facilities MSME sector, the government takes special care of this sector by providing various MSME registration advantages and implementing better regulations. Ministry of MSMES, under the government of India, offers several schemes, benefit to order to provide necessary support to MSME sector. To avail benefit s, concessions from government schemes, state schemes and public services, every startup and MSME/SST (small scale Industry) must get itself registered under UDYAM registration.
UDYAM registration is also called MSME (Micro, small and medium enterprises) registration, is a government registration for MSMEs/SSIs providing them with an unique identity number and recognition certificate to certify them as a legal and operational micro, small/medium enterprise. A registered MSME is a small business which is registered under ministry of micro, small and medium enterprises development (MSMED) act. It is classified under two categories:
- Manufacturing enterprises
- Service enterprises
MSMEs (manufacturing/service providing enterprises) can be classified into micro, small and medium enterprises based on their annual turnover.
- A micro enterprise is a company with investment under Rs 1 crore and having an annual turnover under Rs. 5 crore.
- A small enterprise is a company with investment under Rs 10 crore and having an annual turnover under Rs 50 crore.
- A medium enterprise is a company with investment under Rs 50 crore and having an annual turnover under Rs.250 crore.
MSME, UDYAM registration is quite simple, fast and can be done online on official UDYAM registration portal Udyog Aadhar is a 12 digit number, which is compulsory and pre-requisite for MSME registration - An UDYAM registration certificate is an e-certificate issued to MSMEs on completion of MSME registration process. Registration under the micro, small and medium enterprises development (MSMED) act is not compulsory for MSMEs and small scale Industries (SSIs) but is is always better to get MSME/SSI registration in order to avoid various benefit in form of tax rebate, Subsides and schemes from government of India.
Benefits of obtaining UDYAM Registration.
- MSMEs registration under the ministry of MSMEs get priority on applications for Licenses, approvals and registration certificates issued by the government of India.
- Business or enterprises registered as MSME/SSI under the ministry of MSMEs are eligible to avail a benefits of 1% interest on overdraft as part of the credit Guarantee Trust Fund Scheme.
- The registered MSMEs can claim for reimbursement on payment made for obtaining the ISO certificate.
- Minimum Alternate Tax (MAT) for registered MSMEs can be extended up to 15 years. Whereas the regular MAT is 10 years for other entities.
- The registered MSMEs under Ministry of MSMEs are given a subsidy of 50% on patent registration fees. Thus it helps in reduction of costs for setting up the industry.
- MSMEs can avail benefits of an one time settlement fees for delayed or non paid amount.
- Registered MSMEs are given preference in government tenders, since the UDYAM registration portal is directly linked with various government e-market places and state government's portal for issuing tenders. Registered MSMEs can be avail Government security Deposit (EMD) waiver which is useful while participating in government tenders.
- MSME registered entity gets eligible for CLCSS (Credit linked capital subsidy scheme).
- Registered MSMEs having an MSME certificate can avail tax exemption under direct tax laws.
- Registered MSMEs can obtain Industrial Promotion Subsidy (IPS) under various government schemes and programs for creating awareness / information about their business across the world Registered MSMEs can avail subsidy from NSIC and credit rating.
- MSMEs registered under the ministry of MSMEs obtain protection against delayed payments for material/ services supplied. Government empowers those MSMEs to charge compound interest on the delayed payments.
- Business enterprises under the ministry of MSMEs are eligible to get bank loans without any collateral or security. The government of India provides collateral free credit/ loan to micro and small enterprises through the credit Guarantee Fund scheme (CGS).
- Businesses/ enterprises registered under the ministry of MSMEs are eligible for subsidies on electricity bill especially in case of manufacturing units etc.
- Registered MSME can avail subsidy on trademark and barcode registration.