CA Pooja Madhan

MSME i.e Micro, Small and Medium Enterprises are the backbone of any developing country. In India too 45% of the total industrial employment, 50% of the total exports of India and 95% of the Industrial units comes from MSMEs and as per the msme.gov.in official website of MSMEs more than 6000 types of products are manufactured by the MSME industries.

The classification of MSMEs among Micro, Small and Medium Enterprises were based upon the investment in the Plant & Machinery earlier, but under the Aatmanirbhar Bharat Abhiyan, the Government of India has recently revised the classification on the basis of investment and annual turnover. Further the distinction between the Manufacturing Sector and Service Sector under the MSME definition is no more applicable, Hence below tables show the threshold for the Micro, Small and Medium Enterprises under the existing and the new classification.

  1. Existing Classification
Nature of BusinessInvestment for Micro EnterprisesInvestment for Small EnterprisesInvestment for Medium Enterprises
ManufacturingLess than Rs. 25 LakhsLess than Rs. 5 CroreLess than Rs. 10 Crore
ServicesLess than Rs. 10 LakhsLess than Rs. 2 CroreLess than Rs. 5 Crore
  1. Revised Classification under Aatmanirbhar Bharat
CriteriaMicro EnterprisesSmall EnterprisesMedium Enterprises
InvestmentLess than Rs. 1 CroreLess than Rs. 10 CroreLess than Rs. 50 Crore
Annual TurnoverLess than Rs. 5 CroreLess than Rs. 50 CroreLess than Rs. 250 Crore

Note : For the purpose of considering an enterprises to be MSME both the criteria of Investment and Annual Turnover should be within the threshold mentioned above.

Benefits of MSME Registration

After getting the MSME Registration, the enterprise can enjoy a lot of privileges as mentioned below;

  1. Reduced rate of interest on loan by 1-1.5% than regular interest rates.
  2. MSMEs are allowed to carry forward the MAT credit upto 15 years instead of 10 years in the normal case.
  3. Eligible to apply for Government tenders applicable to MSMEs.
  4. Government License and certification preference.
  5. One time settlement fee.

Registration Process and Time

The MSME Registration process is an online hassle free procedure and within the same day MSME Registration Certificate is issued.

Documents Required for MSME Registration

  1. Aadhaar Card
  2. Proof of registered office
  3. Sales and Purchase Invoices
  4. Certificate of Registration , MOA and AOA in case of company
  5. Partnership Deed In case of Partnership Firm
  6. Invoice of machinery purchased