6 Essential Facts that you must know about SSI-MSME Registration

All the Small scale industries (SSI) or Micro, Small and Medium Enterprises (MSME) can register themselves under the MSMED Act. Although it is not compulsory but will be beneficial if you do so. The several benefits include priority sector lending, capital investment subsidies and power tariff subsidies, excise and direct tax exemptions. To stand in the category of MSME, the manufacturing enterprises require to have an investment of less than Rs. 10 crores in plant and machinery, whereas enterprises of service must have no more than Rs. 5 crores invested in plant and machinery. At any point in time, if you crossed this investment deadline then you need to cancel your registration under the MSMED Act. In this article, you will get to know more about SSI registration and MSME registration.

What is exactly SSI/MSME Registration?

Every nation has some economic hopes from its young and small businesses. So, the Indian government having this mentality offers numerous advantages to such organizations like an easy loan, cheaper credit, tax exemptions etc. so as to achieve growth at a much faster pace and without enduring hardships. But to avail, the benefits of this, the organizations that qualify must get an MSME or SSI registration (Regulated by the MSMED Act). The registration of SSI/MSME is one of the easiest of government registrations to be granted.

Let us discuss it in divisions. MSME is classified into two categories:

• Manufacturing enterprises

• Service enterprise

Following are the table describing in term of investment in Plant and Machinery/Equipment as below:

Is SSI/MSME Registration mandatory or voluntary?

The only need for SSI registration is to avail of subsidies and benefits. So, it is completely voluntary. Although, it is fairly easy registration to get quickly whereas many businesses opt for it over other registrations.

Why should I apply before commencing operations?

Because you can only avail Provisional SSI registration certificate (PRC). The Provisional registration certificate will enable the unit to obtain term loans and working capital under priority sector lending and make it easier to procure various NOCs and clearances from regulatory bodies, such as the pollution control board.

What documents are required for filing SSI/MSME registration?

Following are the documents required for the MSME and SSI registration:

• Applicant's Aadhar Card

• Business PAN card

• Business Address Proof such as rent deed or utility bills.

• Owner's Name

• Category of the applicant (General, SC/ST or OBC)

• Organization Name and type

• Bank account details

• Previous registration details of the enterprise

• Date of commencement of the business and Address

• The Major activity of the enterprise.

• Code of NIC of the enterprise.

• Location of Direct Industry Code.

• The number of persons employed.

• Investment in Plant, Equipment, and Machinery.

What are the Benefits of SSI/MSME registration?

• Easily get government tenders.

• Easily get various licenses and permits for your business.

• Import subsidy of 15 % on fully automatic machinery in case of a bank loan.

• ISO Certification compensation.

• There is no need for filing returns.

• There are subsidies on electricity bills.

• These are the priority sector lending.

• Subsidies will be provided under excise laws and direct tax laws.

• Beneficial interest rates.

Why there is a need to maintain records?

Any SSI entity that fails to follow any regulations laid by the government will be deregistered. Moreover, in case if you exceed the investment limits ultimately your registration of a firm will be cancelled.

This article has been contributed by Sarubpreet Kaur who is a content writer with LegalRaasta. Legal Raasta is an online portal that assists companies and startups with Company registration, NBFC Registration, GST registration and ITR filing.