Advantages of MSME Registration
Not every company can be as large as TCS, Infosys or Reliance. There are thousands of other companies that do not fall under the category of large companies. In fact, you can count these large companies on your fingers but not the small or medium ones. MSME stands for Medium, Small and Micro Enterprises. This bifurcation is recognized by Government as well as tax authorities. Recently, in Budget 2017-18 the Modi Government also decreased income tax on such companies to 25%. We learn here Advantages of MSME Registration, MSME registration is not mandatory and neither its statutory but it has its own advantages.
The definition of medium, small and micro companies is given under Medium Small Micro Enterprise Development Act, 2006. MSMEs constitute the biggest part of our country's economy. Even Sensex and Nifty has a separate index for medium and small listed companies, named MidCap and SmallCap. According to Government survey MSMEs contribute to 40% of industrial production and 45% of exports.
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Benefits of MSME Registration
Through its growth policies the Government is trying hard to support MSMEs. To avail those benefits you must first register yourself as an MSME.
- Credit Guarantee Scheme: According to this scheme MSMEs are extended a loan up to ₹1 crore to MSMEs wherein Central Government takes the guarantee of the borrower. So if you have an investment plan or want to diversify your business the Government is here to help you.
- Tax Benefits: MSMEs are also extended tax benefits from time to time. Recently income tax was also reduced from 33% to 25% for financial year 2017-18.
- Subsidies: From time to time Central as well as State Governments roll out subsidies to promote MSMEs. Even SIDBI offers loans at subsidised rates to MSME industries.
- Banking benefits: The Modi Government recently introduced a corpus fund of ₹10,000 crores for small and medium businesses under MUDRA Scheme wherein they could borrow maximum of ₹10 lacs at low interest rates to fund their working capital.
Apart from these there are various other cash and non-cash benefits bestowed upon MSMEs by Central and State Governments. Get your enterprise registered today and avail numerous benefits.
With introduction of GST there won't be any need of Central Sales Tax as all inter and intra state sales, as a given product will be taxed at the same rate.
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