1. What are the Different Type of MSME ?
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.
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.
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.
3. Is MSME Registration is Voluntary or mandatory?
As said above, SSI/MSME registration is totally voluntary. Businessmen and entrepreneurs usually get this done to utilise the advantages offered under it. The registration process is quite easy and simple. You can easily avail it (provided you have a manufacturing plant or a commercial space where you render services), many businesses opt for it over other registrations.
2. How Do You Get MSME Registration?
Although, there is no compulsion to get MSME registration but is always advised to do so as it provides lots of benefits to the enterprises registered under MSME Act. It will save you from a lot of inconveniences later on. After assigning you the Provisional MSME Certificate and you can begin with your production and even apply for a Permanent Certificate which will add more advantages for you. Always apply for provisional registration at an initial stage of the business.
4. How Does MSME Help me to get a Loan from Bank?
MSME are recognised by all the institutions and banks. Special schemes are drafted to recognise them as well. Banks prefer MSME instead of normal enterprises to lend loans. The possibility of getting a sanctioned loan is much higher in a case of MSME. Bank loan interest rates will also be lower. There may also be preferential treatment in case of delay in repayment.
5. What Benefits are given to MSME by State and Central Government?
Many state government prefers enterprises which are registered under MSMED Act. Subsidy such as on power, taxes, and much more is offered by state governments. In most of the states, sales tax exemption is provided purchase preferences is given on goods produced. The enterprise may also relish excise exemption scheme and exemption from certain direct taxes in the initial years of your business.