Benefits of MSME/SSI Registration

  • Get Loan without collateral/ Mortgage -
    Under Credit Guarantee Scheme (CGSME) launched by SIDBI and Government of India get loan/credit upto 1 crore without any mortgage/ collateral
  • Exemption of Interest rates -
    SMEs with MSME registration can avail benefits upto 1 % exemption on bank overdraft (OD)
  • Protection against Overdue -
    Maximum period for payment for purchases from MSME shall not exceed 45 days, in case of delay, the buyer is liable to pay interest to the SME supplier, at 3 times of the bank rate.
  • Tax Benefits -
    MSME/ SSI Registered business get tax benefits/subsidies like capital gains tax and various income taxes.
  • Subsidized Electricity Rates -
    Enterprises can avail discounts on electricity bills once they submit application to electricity department.
  • Government Tender Privileges -
    The Government of India gives special preference in buying from Micro and Small businesses through Govt. tenders.

What is MSME / SSI Registration ?

MSME stands for Micro, Small and Medium Enterprise defined under MSME development Act 2006. MSME registration certifies the enterprises to show them as Micro, Small or Medium Enterprise. Government have different schemes and tax benefits for each type of classification. To avail the benefits MSME Certification is Mandatory. For MSME registration enterprise must enroll their name under The Micro, Small & Medium Enterprises Development Act, 2006

What are different type MSME Registration?

Micro Enterprises

Micro-enterprises are the smallest entities, of course. The investment under Micro manufacturing enterprises should be less than Rs. 25 lakhs in plant and machinery, whereas, the micro service enterprises should not exceed Rs. 10 lakhs investment.

Small Enterprises

In small manufacturing enterprises, the investment should be in between Rs. 25 lakh and Rs. 5 crores in plant and machinery, while in small service enterprises this investment limits between Rs. 10 lakh and Rs. 2 crores.

Medium Enterprises

And if we'll talk about the Medium manufacturing enterprises, then the investment should be in between Rs. 5 crore and Rs. 10 crores in plant and machinery, and for small service enterprises it should be in between Rs. 2 crore and Rs. 5 crores.


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List of Documents Required

  • Rent AgreementCopy of Adhaar Card.
  • Food LicenseCopy of PAN Card
  • FSSAIRent Agreement of Premises/ Electricity Bill
  • FSSAI LicenseCopy of cancelled cheque

Frequently Asked Question(FAQs)

  • 1.What is the definition of MSME? +
  • The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under:
    Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:
    A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh;
    A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore;
    A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.
    In case of the above enterprises, investment in plant and machinery is the original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide
    Enterprises engaged in providing or rendering of services and whose investment in equipment (original cost excluding land and building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006 are specified below.
    A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10 lakh;
    A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore;
    A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.
  • 2. What is the support available for collateral free borrowing? +
  • The Ministry of MSME, Government of India and SIDBI set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) with a view to facilitate flow of credit to the MSE sector without the need for collaterals/ third party guarantees. The main objective of the scheme is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed.The Credit Guarantee scheme (CGS) seeks to reassure the lender that, in the event of an MSE unit, which availed collateral- free credit facilities, fails to discharge its liabilities to the lender, the Guarantee Trust would make good the loss incurred by the lender up to 85 per cent of the outstanding amount in default. The CGTMSE would provide cover for credit facility up to Rs. 100 lakh which have been extended by lending institutions without any collateral security and /or third party guarantees. A guarantee and annual service fee is charged by the CGTMSE to avail of the guarantee cover. Presently the guarantee fee and annual service charges are to be borne by the borrower
  • 3. What support is provided by the Ministry to improve quality of products produced in MSME sector? +
  • The TEQUP scheme envisages another activity, namely, Product Quality Certification. The main objective of this scheme is to encourage MSMEs to Acquire Product Certification Licenses from National / International Bodies , thereby improving their competitiveness. The primary objective of this activity is to provide subsidy to MSME units towards the expenditure incurred by them for obtaining product certification licenses from National / International standardization Bodies. Under this Activity, MSME manufacturing units will be provided subsidy to the extent of 75% of the actual expenditure, towards licensing of product to National/International Standards. The maximum GOI assistance allowed per MSME is Rs.1.5 lakh for obtaining product licensing /Marking to National Standards and Rs. 2.0 lakh for obtaining product licensing /Marking to International standards. One MSME unit can apply only once under the scheme period.

  • 4. What is the Difference Between MSME and SSI Registration? +
  • There is no difference between MSME Registration and SSI Registration. Earlier MSME Registration was known as SSI Registration.
  • 5.Who all are eligible for MSME Registration? +
  • Any entrepreneur having valid Aadhaar Number can apply for MSME Registration Online
  • 6. What is meant by Priority sector Lending? +
  • Priority sector lending include only those sectors, as part of the priority sector that impact large sections of the population, the weaker sections and the sectors which are employment-intensive such as agriculture, and Micro and Small enterprises. Detailed guidelines on Priority sector lending are available in RBI Master Circular.

  • 7. Is there any provision for grant of composite loans by Banks? +
  • A composite loan limit of Rs.1crore can be sanctioned by banks to enable the MSME entrepreneurs to avail of their working capital and term loan requirement through Single Window in terms of RBI Master Circular on lending to the MSME sector dated July 1, 2010. All scheduled commercial banks have been advised by our circular RPCD.SME&NFS. BC.No.102/06.04.01/2008-09 on May 4, 2009 that the banks which have sanctioned term loan singly or jointly must also sanction working capital (WC) limit singly (or jointly, in the ratio of term loan) to avoid delay in commencement of commercial production thereby ensuring that there are no cases where term loan has been sanctioned and working capital facilities are yet to be sanctioned. These instructions have been reiterated to schedule commercial banks on March 11, 2010.
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