SSI stands for Small Scale Industries. Registering an organization as an SSI will rise the organization to various benefits. A brief account of SSI registration, procedures and benefits are following.
MSME is a acronym of Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the country’s economy level.
The MSME sector grants to 45% of India’s Total Industrial Employment, 50% of India’s Total Exports and 95% of all industrial units of the country and more than 6000 types of products are assembled in these industries (As per msme.gov.in). When these industries growth increased, the economy of the country increases as a whole and flourishes. These industries are also identified as small-scale industries or SSI’s.
MSME are categorized into two classifications:
They are defined in term of investment in Plant and Machinery/ Equipment as given below
|Manufacturing Enterprises||Investment up to Rs 2,500,000||Investment Less than Rs 50,000,000||Investment Less than Rs 100,000,000|
|Service based Enterprises||Investment Less than Rs 10,00,000||Investment Less than Rs 20,000,000||Investment Less than Rs 50,000,000|
If the business location is self-owned– Allotment letter, possession letter, lease deed or property tax receipt. If there is a municipal license in the business name or in the name of the proprietor, partner or director of the business, no other possession document is needed to be submitted. If the business location is rented– Rent receipt and a no objection certificate from the landlord is needed. Also, any utility bill or document evidencing the landlord’s ownership is to be provided.
Business is wanted to provide a copy of sale bill related to each end product that it will supply. Also, for each raw material that it will purchase, a purchase bill has to be provided for verification process.
Even though there is no statutory basis for SSI registration, organizations would normally get registered to avail some benefits, incentives or support provided either by the Central or State Government. Some of the incentives are as follows:
Banking Laws, Excise Law and the Direct Taxes Law have incorporated the term SSI in their exemption notifications. Though in many cases they may declare it differently, generally the registration certificate provided by the registering authority is shown as proof of being registered as an SSI. States/Union Territories have their own separate set of facilities and incentives for small scale industries. They tent to development of industrial estates, tax subsidies, power tariff subsidies, capital investment subsidies and other required support. Both the Center and the State Governments, whether under law or otherwise, mainly focus their incentives and support packages generally to entities registered with them.
The permanent registration certificate entitles the organization to the following benefits:
The following essential features are considered while providing the permanent registration certificate
A SSI registration can be revoked if the following conditions are violated
Every nation’s economic growth is based on its young, small businesses. The Indian government, in accordance with this concept, provides numerous benefits to such organizations so that they may achieve growth with less complexity. To avail of these benefits, the organizations that get qualified must get an MSME or SSI Registration (regulated by the MSMED Act), which is among the easiest of government registrations to be provided.
Micro, small and medium enterprises (MSMEs) are considered as the backbone of India’s economic growth, accounting for almost 40% of gross industrial value and 45% of total direct and indirect exports. Hence, the government has established enormous schemes and aids to ensure the MSME lead a struggle free existence in the country, and also contribute, to the Indian Economy. Some of these schemes have been started by the central government, while remaining others are promoted by the state government. To avail of them, however, you require an Udyog Aadhar registration.
Benefits from Banks: All banks and other financial institutions consider MSMEs and have provided special schemes for them. This usually involves priority sector lending, which defines that the likelihood of your business being granted a loan is high and with lower bank interest rates. There may also be preferential treatment in case of delay in repayment of their loans.
Tax Benefits: According to your business range, you may enjoy an excise exemption scheme as well as exemption from some important direct taxes in the initial years of your business.
Benefits from State Governments: Most states provide those who’ve registered under the MSMED Act subsidies on power, taxes and entry to state-run industrial estates. In specific, there is a sales tax exemption in most states and purchase preference on goods manufactured.
Benefits from Central Government: The central government, from time to time, announces and updated schemes to benefit MSMEs, such as the credit guarantee scheme.
Credit Guarantee Scheme (CGTMSE)
One of the major problems that the small scale industries face is credit and input of income from several sources to support them. The Credit Guarantee scheme, established to support MSME, comes with alterations to create it more beneficial for small range of traders.
The salient characteristics of the scheme involve,
1. Enhancing the optimal eligibility loan from Rs. 25 lakh to Rs. 50 lakh.
2. Lower the one-time guarantee for loans availed of by the MSME in North-Eastern region of India from 1.5% to 0.75%.
3. Rising the extent of guarantee carry from 75% to 80% for:
4. Women operated Medium and small scale enterprises
5. Micro enterprises, which have the eligibility for getting loans up to 5 lakhs
6. Loans acquired in North Eastern region of the country
7. Lowering the one-time guarantee fee for all loans availed in North Eastern India from 1.5% to 0.75%.
Apart from these advantages, the government also continues, in a prescribed manner, to enhance the ‘List of products reserved for purchase from MSME’. A detailed list is available in the authorized official website. Accordingly, the MSME is aided by the government to crate use of these product lists, and manufacture and supply these manufactured products to large scale industries, and make profit in this kind of process.
For promoting startups or entrepreneurship, the government gives special advantages to the small businesses in the form of subsidies and incentives. Also, banks provide loans at low interest rates to set up these kinds of businesses. For availing those, the small businesses want to register under Micro, Small and Medium Enterprises (MSMEs) act. If a business is registered under MSMEs act, it can avail various advantages like cheaper bank loans, tax benefits, preference during the tender process, and access to several schemes and incentives of government.
MSME enterprises of manufacturing sector can be divided on the basis of capital amount invested in plant and operating machinery –
MSME enterprises in the service based sector can be classified on the basis of amount invested in equipment-
Aadhar number is now mandatory for registering under MSME act. An application is to be applied through online using Udyog Aadhar Registration, and this can be verified using e-Aadhar One Time Password (OTP). Provisional registration is provided in the initial five years if an entity hasn’t commenced its business yet. During this period, it can acquire loans from banks, and apply for several NOCs from regulatory bodies. Once the entity starts its operations, it can file for a permanent license which has lifetime validity, unless it is canceled.
The enterprise has to provide business address proof, copies of purchase and sale bill, and licenses from regulatory bodies.
If the business place is self-owned– Allotment letter, possession letter, lease deed or property tax receipt. If there is a municipal license in the business name or in the name of the proprietor, partner or director of the business, no other possession document is needed to be provided.
If the business place is rented– Rent receipt and a no objection certificate (NOC) from the land owner is needed. Also, any utility bill or document evidencing the land owner’s ownership is to be submitted.
Business is needed to provide copy of sale bill related to each end product that it will supply. Also, for each raw material if it is small that it will purchase, a purchase bill has to be provided.
If the business is a partnership firm, the entity compulsorily provides its partnership deed. If the partnership firm is registered, it has to provide partnership registration certificate also. In case of a company, copy of Memorandum of Association and Articles of Association, and certificate of incorporation has to be compulsorily provided. With it, copy of the resolution presented in the general meeting, and a copy of board resolution authorizing a director to sign the MSME application is also to be provided.
In certain cases, the applicant has to provide a copy of industrial license which is to be acquired by providing an application to Govt. of India. Further, all bills and receipts related to purchase and installation of plant and machinery have to be maintained safe and wanted to be submitted on demand. MSME, hence, has various support systems in the state as well as the center, in terms of both commencing a new project as well as its continued before existence. The government also focuses to supply trained professional, input resources and the flow of capital via assistance from venture capitalists, and via private equity funds.
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