Good News!!!!   To provide relief to millions of small businesses reeling under the impact of the Covid-19 lockdown, Finance Minister Nirmala Sitharaman on Wednesday announced a slew of liquidity measures, which include collateral-free automatic loan worth Rs. 3-lakh crore. Borrowers with up to Rs. 25 crore outstanding and Rs. 100 crore turnovers are eligible.   It’s a high time to get your business registered as a MSME!!!   Micro- Small and Medium Enterprises (MSMEs) Micro, Small and Medium Enterprises (MSMEs) are widely called the back-bone of the Indian economy. These Enterprises plays a very important role in Indian economy as it contributes to around 30% of GDP, thereby reflecting its huge significance in terms of economic growth. Such enterprises provide support to the industries through raw material supply and supply of goods & finished product. In India, MSMEs are classified in terms of investment made in plant & machinery and equipment. Meaning Recognizing the contribution and potential of the sector, the definitions and coverage of the Small Scale Industry (SSI) sector were broadened significantly under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The Act recognized the concept of “enterprise” to include both manufacturing and services sector and separately defined medium enterprises. MSME Development Act 2006 of India defines micro, small and medium enterprises on the basis of their investment in plant and machinery (for manufacturing enterprise) and on equipments for enterprises providing or rendering services. According to this act, the definitions of micro, small and medium enterprises include the following:
Type of EnterprisesInvestment and Annual Turnover in Manufacturing & Services
Micro EnterpriseInvestment Does not exceed Rs. 1 crore And Turnover Does not exceed Rs. 5 crore
Small EnterpriseInvestment Does not exceed Rs. 10 crore And Turnover Does not exceed Rs. 50 crore
Medium EnterpriseInvestment Does not exceed Rs. 20 crore And Turnover Does not exceed Rs. 100 crore
Registration Scheme of MSMEs Small Scale and ancillary units should seek registration with the Director of Industries of the concerned State Government. The main purpose of Registration is to maintain statistics and maintain a roll of such units for the purposes of providing incentives and support services. Objectives of Registration Scheme
  • To enumerate and maintain a roll of small industries to which the package of incentives and support are targeted.
  • To provide a certificate enabling the units to avail statutory benefits mainly in terms of protection.
  • To serve the purpose of collection of statistics.
  • To create nodal centers at the Centre, State and District levels to promote SSI.
Benefits of MSME Registration Although getting MSME online registration is an easy task and it provides a variety of benefits:-
  • Subsidy on Patent Registration.
  • Overdraft Interest Rate Exemption.
  • Industrial Promotion Subsidy Eligibility.
  • Protection against Payments (Delayed Payments)
  • Fewer Electricity Bills.
  • ISO Certification Charges Reimbursement. Easy finance availability from Banks, without collateral requirement
  • Protection against delay in payment from Buyers and right of interest on delayed payment
  • Preference in procuring Government tenders,
  • Stamp duty and Octroi benefits,
  • Concession in electricity bills
  • Reservation policies to manufacturing / production sector enterprises
  • Time-bound resolution of disputes with Buyers through conciliation and arbitration
  • Reimbursement of ISO Certification Expenses
  • Credit prescription (Priority sector lending), differential rates of interest etc.
  • Excise Exemption Scheme
  • Exemption under Direct Tax Laws.
  • Financial Assistance for setting up testing facilities through NSIC
  • Statutory support such as reservation and the Interest on Delayed Payments Act.
  • Subsidy on ISO Certifications
  • Subsidy on NSIC Performance and Credit ratings
  • Participation in Government Purchase registrations
  • Registration with NSIC
  • Counter Guarantee from Government of India through CGSTI
  • Waiver in Earnest Money (Security Deposit) in Government tenders
  • Reduction in rate of Interest from banks (Subject to ratings)
  • Free of cost government tenders
Who Can Apply for Registration All classes of enterprises as may be classify by the Central Government, whether
  • Proprietorship,
  • Hindu undivided family,
  • Association of persons,
  • Co-operative society,
  • Partnership firm,
  • Company or Undertaking, by whatever name called
can apply for the registration and get qualified for the benefits provided under the Act. Information Required to register MSME:-
  1. Enter 12 digit Aadhaar card of the applicant
  2. Complete OTP verification process
  • Preparation of application by entering below information:-
  1. Name of Entrepreneur/Applicant
  2. Social category
  3. Name of Enterprise
  4. Type of Organization
  5. Location of Plant
  6. Contact Number
  7. Email ID
  8. Date of Commencement of Business
  9. Bank Account Number
  10. Main Business Activity of Enterprise
  11. NIC code
  12. Number of employees employed
  13. Investment in Plant and Machinery
  14. DIC office details, where business is established
  • Application process
  1. documents to be submitted to DIC office regarding its registration
  • Issuance of registration certificate


The Provisional Registration Certificate (PRC) will be valid for a fixed period of 5 years from the date of issue of PRC. In other words, the PRC will automatically lapse at the end of 5 years from the date of issue of the certificate or the date of commencement of production by the unit, whichever is earlier.

The following persons can apply for registration:-
  • Sole proprietor
  • Hindu Undivided Family
  • Partnership firm
  • One person company
  • Limited liability partnership
  • Private limited company
  • Co-operative societies
  • Society
  • Trust

After filing online MSME application form, MSME Registration Certificate will be issued immediately at email.

For MSME online Registration there is a separate DIC (District Industries Centre) department in each state. They have the power to issue MSME Registration Certificate with the MSME Number.

Specified Companies are required to file returns with ROC in e-form MSME-1

 This is given for the pre-operative period and enables the units to enjoy the benefits after its registration like term loans etc. PRC is valid for five years. If the entrepreneur is unable to set up the unit in this period, he can apply for fresh application at the end of five years period.

According Section 22 of MSME Act, 2006, a buyer in its audited annual statements is required to be furnishing the following information:-

  • the principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier as at the end of each accounting year;
  • the amount of interest paid by the buyer in terms of section 16, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year;
  • the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act;
  • the amount of interest accrued and remaining unpaid at the end of each accounting year
  • the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under section 23.

Under section 9 of MSME, Act 2006 the companies who get supplies of Goods & services form MSME and whose payment is due for exceeding 45 days from the date of acceptance of Goods & Services (hereafter referred to as “Specified Companies”) and all those companies need to file half yearly return to MCA with following information:-


  1. the amount of payment due and
  2. the reasons of delay
  1. Every Specified company needs to file MSME Form I with all details of outstanding dues to MSME suppliers within 30 days from the date of publication of this notification dated 22nd January, 2019


  1. Every Specified Company shall file a return as per MSME Form 1 by:-


For Time Period

Date of filling

April to September

31st October

October to March

30th April

Under section 405 of Companies Act, 2013 if company fails to file the return, the Company shall be punishable:-


  1. with fine which may extend to twenty-five thousand rupees and


  1. every officer of the company who is in default, shall be punishable with imprisonment for a term which may extend to six months or


  1. with fine which shall not be less than twenty-five thousand rupees but which may extend to three lakh rupees, or with both.



Renewal of registration certificate will only be required in case of those units whose investment in plant & machinery is more than Rs. 60 lacs and upto Rs. 75 lacs via notification No. 5 (1)/93-SSI Bd. The certificate of registration issued to such units will be valid for a period of 5 years. In other words, renewal of the registration certificate of such industrial undertakings which have investment limits more than Rs. 60 lacs and upto Rs. 75 lacs will be valid upto 5 years. After 5 years if the unit continues to be an ancillary industrial undertaking then the certificate can be re-validated for the next 5 years and so on.

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