What is MSME's Purpose?
The Micro, Small and Medium Enterprise (MSME) definition was introduced by the Government of India in accordance with the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. MSMEs play an important role in the country's socioeconomic development. MSMEs play an essential part in the Indian economy because they are essential contributors to the country's socioeconomic development. MSME began operations in 2006 with the goal of creating a competitive environment and encouraging small enterprises to assure rapid growth and economic growth.
Manufacturing and service sectors are the two categories in which MSMEs are classified. Investment, yearly turnover, and investment are used to classify the sectors. The micro, small, and medium enterprises have been reclassified as shown below
Micro :- Annual Turnover: Rs. 5 crore and Investment in Plant and Machinery or Equipment: Rs. 1 crore.
Small :- Plant and machinery or equipment investment of not more than Rs.10 crore; annual turnover of not more than Rs.50 crore.
Medium :- Plant and Machinery or Equipment Investment: Rs.50 crore and Annual Turnover: Rs.250 crore.
Is it necessary for MSME to register?
No, MSME registration is not required. The MSME Registration, on the other hand, comes with all these benefits :-
Exemption from Overdraft Interest Rates :- Businesses or enterprises that are MSME-registered can receive a 1% discount on their Over Draft, according to a system that varies per bank.
Payment Protection Against Delays :- Buyers of services or products from MSME's or SSI's have a trend of delaying payment. The Ministry of Micro, Small and Medium Enterprises lends a boost to these businesses by allowing them to collect interest on payments that have been delayed by the customer.
Reimbursement of ISO Certification Fees :- The fees for ISO certification can be claimed back by registered MSME businesses.
MSME's are fast expanding, thanks to government backing and young people who are inspired and daring enough to establish their own business. As a result, understanding the registration procedure and its rewards is critical in boosting the entrepreneurial spirit of MSME and SSI owners.