Every nation’s economic hopes are however pinned on its young, small businesses. The Indian government, with this in its mind, offers numerous benefits to such organisations so that they may achieve the growth with less difficulty. In order to avail these benefits, the organisations that qualify must thus get an MSME or SSI Registration (regulated by the MSMED Act), which is among the easiest of the government registrations which is to be granted.
SSI registration or SSI (Small Scale Industries ) Units (Industries having investment less than INR 10 million) are the registrations which are registered with the Director of Industries of their respected states. This registration thus offers many incentives and also support services as well as it helps in maintaining the statistics and the role of these units.
Micro, small and the medium enterprises (MSMEs) power India, that are accounting for almost 40% of its gross industrial value and 45% of the total direct and the indirect exports. Hence, the government has introduced various schemes and it also aids to ensure the MSME lead a struggle-free existence in the country, and it shall also contribute, to the Indian Economy. Some of these schemes have been initiated by the central government, while the others are promoted by the state government. In order to avail of them, however, you must need a Udyog Aadhar registration.
SSI/MSME registration is however used by the states for implementing their policies as these units lie directly under the law of states. Some states may have a ‘SIDO Registration Scheme’ or ‘State Registration Scheme’.
The benefits that are offered under the scheme are:
- Credit prescription (priority sector lending), differential rates of interest etc.
- Excise Exemption Scheme
- Exemption under the Direct Tax Laws
- Statutory support such as the reservation and the interest on Delayed Payment Act.
It is thus noted that the Banking Laws, Excise laws, and the Direct Taxes laws have incorporated the word SSI in their exemption notifications. The States/UT have their own package of facilities and also have incentives for the small scale. They also relate to the development of industrial estates, tax subsidies, power tariff subsidies, capital tariff subsidies and the other support.
Thus some of the benefits of SSI registration are :
Benefits from Banks: All the banks and the other financial institutions recognize SSI and they also have created some of the special schemes for them. This however usually includes the priority sector lending, which means that the likelihood of your business being sanctioned a loan is high, and the lower bank interest rates. There may also be preferential treatment in case of delay in repayment.
Tax Benefits: Depending on your business, you may also enjoy an excise exemption scheme as well as an exemption from certain direct taxes in the initial years of your business.
Benefits from State Governments: Most of the states offer those who’ve registered under the MSMED Act subsidies on power, taxes and the entry to state-run the industrial estates. In particular, there is a sales tax exemption in most states and the purchase preference on the goods that are produced.
Benefits from Central Government: The central government, from time to time, announces the schemes to the benefit MSMEs, such as the credit guarantee scheme:
Credit Guarantee Scheme (CGTMSE)
Also one of the major struggles that the small scale industries face is that the credit and input of income from various sources in order to support them.
Once getting permanently registered under the scheme or for beholding the PRC (Permanent Registration Certificate), the units are thus enabled to:
- Incentives and concessions in power tariff
- GST exemption and Income-tax exemption
- Purchase preference and price of goods produced
- Permanent registration of tiny units should be renewed after every 5 years
- Availability of raw material depending upon existing policy
The states also offer not equivalent though few benefits to the units beholding the PRC (Provisional Registration Certificate)
- The units can obtain facilities for accommodation, land, other approvals etc.
- Obtain various necessary NOC’s and clearances from regulatory bodies such as Pollution Control Board, Labor Regulations etc.
The procedure of getting registered under SSI Act is very simple and is as follows:
- The unit applies for PRC in prescribed application form. No field inquiry is done and PRC is issued.
- A unit can apply for PRC for any item that does not need an industrial license which amounts to items that are listed in Schedule-III and items not listed in Schedule-I/II of the licensing Exemption Notification. Units that have employed less than 50/100 workers with/without power can apply for SSI registration even for those items included in Schedule-II.
- PRC is valid for five years. If the entrepreneur is not able to set up the unit in this time period, he can apply afresh at the end of five years.
- Once the unit begins production, it has to apply for permanent registration on the prescribed form.
The following basis of evaluation:
- The unit has acquired all the requiring clearances whether statutory or administrative. E.g. NOC from Pollution Control Board, drug license under drug control order, if required etc.
- The unit does not violate any locational restrictions in force, at the time of evaluation.
- The value of plant and machinery is within prescribed limits.
- The unit is not owned, controlled or subsidiary of any other industrial undertaking as per notification.
The state is the sole authority for the registration and regulatory process, hence it can anytime call off an enterprise under the SSI Act. The following are the offenses leading to de-registration:
- It crosses the investment limits.
- It begins manufacturing any new item or items that need an industrial license or another kind of statutory license.
- It does not satisfy the condition of being owned, controlled or being a subsidiary of any other industrial undertaking.
MSME/SSI , hence, has several support systems in the state as well as the center, in the terms of both starting a new project as well as its continued existence. The government also aims in order to supply the trained professional, input resources and also the flow of capital through an assistance from the venture capitalists, and also through private equity funds.
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