What is MSME Registration and what are it’s conditions

Posted by Aaranyak Consultancy on November 20th, 2019

SSI Registration which stands for Small Scale Industry Registration is a certification from the Ministry of Micro, Small and Medium Enterprises which makes a business eligible to avail a number of schemes and subsidies promoted by the Government to boost small businesses in India. This blog gives a brief look into the details and the benefits of this certification.

SSI Registration, Small Scale Industry Registration, Small Business Registration all fall in the same bracket of MSME Registration in India and is provided by the Directorate of Industries of the State Government. The objective of this certification is to main statistics and a roll of SSI businesses in India for the purposes of providing incentives and support services. The procedure for obtaining the registration may vary from state to state as each of the state governments has adopted the uniform registration procedures as per the MSME guidelines and some of them have made modifications to the procedures for obtaining the registration.

Eligibility Criteria –

The registration can be obtained by both manufacturing units and service rendering enterprises but the eligibility criteria are different for both the sectors.

For manufacturing units, registration can be obtained if the investment in plant and machinery excluding land & buildings) is within any of the following levels:

• Micro Enterprises: Investment of upto Rs.25 lakhs in plant and machinery
• Small Enterprises: Investment of upto Rs.5 crores in plant and machinery
• Medium Enterprises: Investment of upto Rs.10 crores in plant and machinery

For service rendering units, registration can be obtained if the investment in plant and machinery excluding land & buildings) is within any of the following levels:

• Micro Enterprises: Investment of upto Rs.10 lakhs in equipment
• Small Enterprises: Investment of upto Rs.2 crores in equipment
• Medium Enterprises: Investment of upto Rs.5 crores in equipment

Now let’s discuss the benefits of which firms will be getting from SSI Registration –

Though it is not mandatory to have a certification for small businesses in India, however, the businesses having one can avail some benefits, incentives or support given either by the Central or State Government. Some of the key benefits that are ensured by the registration include –

• Priority sector lending in Banks
• Reduction in bank loan interest rate
• Excise exemption scheme
• Exemption under direct tax laws
• Statutory support such as reservation
• Interest on Delayed Payments Act

But that’s not all; adding to the above-mentioned benefits provided by the Central Government, State Governments and Union Territories have implemented their own package of facilities and incentives for Small Scale Industries. Conventional benefits relate to the development of industrial estates, tax subsidies, power tariff subsidies, capital investment subsidies, and other support. Both the Centre and the State Government subsidies aimed at small businesses are provided only to those businesses having SSI registration.