THE ADVANTAGES OF HAVING A MSME / UDYOG AADHAAR

Posted 3 years ago in BUSINESS.

The Government of India launched the Loans Guarantee Fund Scheme for Micro and Small Enterprises (CGS) to provide collateral-free credit to the micro and small business sector.

THE ADVANTAGES OF HAVING A MSME / UDYOG AADHAAR

Banks offer no-collateral loans:

The Government of India launched the Loans Guarantee Fund Scheme for Micro and Small Enterprises (CGS) to provide collateral-free credit to the micro and small business sector. Existing and new businesses are also eligible for coverage under the scheme. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was established by the Ministry of Micro, Small and Medium Enterprises of the Government of India and the Small Industries Development Bank of India (SIDBI) to implement the Credit Guarantee Fund Scheme for Micro and Small Enterprises.

Also Read: MSME Registration

Manufacturing/production sector reservation policies:

One of the key policy initiatives for promoting this sector has been the reservation of items for exclusive manufacture in the SSI sector, as provided for by the Industries (Development and Regulation) Act, 1951. 

The Reservation Policy serves two purposes:

Ensure enhanced consumer products are produced in the small-scale sector.

Increase job prospects by establishing small-scale industries.

Licenses, approvals, and registrations are quite simple to obtain:

It has made it very easy for firms with an MSME Certificate to receive licenses, permissions, and registrations from the appropriate authorities in any field for their business, as they may provide the Certificate of MSME Registration when filing an application.

Special attention is paid to foreign trade shows:

Financial assistance is provided on a reimbursement basis to State/Central Government organizations, industries/enterprises Associations, registered societies/trusts, and organizations associated with MSME under the International Cooperation Scheme for the deputation of MSME business delegations to other countries to explore new areas of MSMEs, Indian MSMEs participate in foreign exhibitions, trade fairs, buyer-seller meetings, and international conferences and seminars that are beneficial to the MSME sector.

Benefits of Octroi:

Up to 31-3-2006, the program of octroi reimbursement granted under the Package Scheme of Incentives, 1993 will be included in the new Scheme on the same pattern. When an account-based cess or other levy is imposed instead of or in place of octroi, the change is also eligible for a refund, just like octroi.

Stamp duty and registration fees are waived:

IT units in public IT parks are currently exempt from stamp duty and registration costs until March 31, 2006. All new industrial units with MSME registration, as well as expansions, will no longer be subject to Stamp Duty and Registration fees.

Exemptions from Direct Taxes: 

MSME-registered businesses are eligible for Direct Tax Exemption in the first year of operation, as specified in the government's policy and depending on the type of firm.

Subsidy for barcode registration:

MSME-registered businesses can take advantage of the scheme's Bar Code Registration discount.

NSIC Performance and Credit Rating Subsidy:

MSME-registered businesses are eligible for an NSIC Performance Subsidy.

Are you eligible for an IPS subsidy?

As stated in the scheme, MSME-registered businesses are eligible for the Industrial Promotion Subsidy (IPS).

Through the CGSTI, the Government of India provides a counter-guarantee:

MSME-registered businesses are eligible for a Counter Guarantee from the Government of India through the CGSTI.

Protection against payment delays:

The Ministry of Micro, Small, and Medium Enterprises protects MSME-registered businesses from late payments from buyers, as well as the right to interest on late payments, through mediation and arbitration, with dispute resolution taking place in the shortest period possible. If a buyer purchases goods or services from a micro or small business with MSME registration, the buyer must pay on or before the date agreed upon between the buyer and the micro or small business. If the agreement does not specify a payment deadline, the buyer must pay within fifteen days of receiving the goods or services. In any instance, a payment payable to a micro or small business cannot be delayed for more than 45 days from the date of acceptance or assumed acceptance. If the buyer fails to pay on time, the buyer must pay compound interest with monthly interest rests to the supplier on the amount due from the stipulated date of payment or fifteen days after acceptance of goods or services. The penalty interest payable to an MSME firm for late payment is three times the bank rate announced by the Reserve Bank of India.

Suggested Read: Print Udyam Certificate

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