Benefits and Govt Scheme/Subsidies of MSME Registration Under MSME

Benefits of MSME registration
Collateral Free Automated Loan

  • A scheme for MSME Loan up to 5 crores, available in 59minutes, is already in existence.  The rate of interest starts from 8% p.a. onwards.

Documents required for loan procedure :

  • Director/ Partner details : Basic, personal  & ownership details
  • GST identification number
  • IT returns in XML format
  • Bank statements for the last six months in pdf format.

Equity Infusion for MSMEs through fund of funds (‘FOF’)
As per the announcement, the aim of the FoF scheme is to infuse ₹50,000 equity into MSMEs. The scheme will cater to around 25 lakhs MSMEs spread across India. The corpus that this scheme has been set up with is around ₹10,000 crores. This will help MSME in following ways:

  • Will help to expand MSME size as well as capacity;
  • To improve the growth potential and viability; the new start-ups and young entrepreneurs will get benefitted from this corpus if they are registered under MSME units;
  • FOF will operate through a Mother Fund & few Daughter Fund;

Provision of Subordinate Debt 
To meet liquidity requirements for few companies, under Atmanirbhar Bharat, the Government of India would facilitate the provision of Rs 20,000 crores Subordinate Debt for functioning MSMEs which are delayed on repayment of loans or have made their loans as NPA.
It would also be fully guaranteed via the Credit Guarantee Trust for the Medium and Small Entrepreneurs (CGTMSE).


Disallowance of Global Tender up to Rs. 200 crores
Indian MSMEs and other companies have often faced challenges and unfair competition from foreign companies. Therefore, Global tenders will be disallowed in Government procurement tenders up to rupees 200 crores.
The government has notified amendments to General Financial Rules (GFR) to ensure that goods and services valued less than Rs 200 crore are being procured from domestic firms, a move which will benefit MSMEs.


Protection against delay in payment
Companies have been mandated to release all due payments to MSME Enterprise outstanding dues for more than 45 days immediately.
Delayed payments can be enforced on MSME Samadhaan platform through the MSME Facilitation Council and the entity can recover the delayed payments along with three times bank interest of SBI.
Also as per Section 19 of the MSMED Act, 2006, no court will entertain the decree or order given by the MSME Council for recovery of dues unless the buyer has deposited 75% of the disputed amount with the court and court shall give a portion of this amount to MSME units. Before proceeding with legal case, the MSME unit must write to the auditors of the buyers informing about the outstanding claims and also specify the outstanding amount along with interest to be mentioned in the annual statement of accounts as per Companies Act, 2013.
MSME Samadhaan is the delayed payment monitoring system. Ministry of MSME has taken an initiative for filing online application by the supplier MSE unit against the buyer of goods/services before the concerned MSEFC of his/her State/UT.


Other Benefits

  • Reimbursement of expenses up to 75% or Rs. 75,000 incurred for obtaining ISO Certificate
  • Reimbursements for 75% of the trade fairs or exhibition cost for three times in a year and once in an international exhibitions.
  • Reduction of 50% government fees for patent and trademark application using MSME / SSI / Udyog Aadhaar Registration Certificate.
  • MSME symbol is like a status symbol for an entity
  • Subsidy on NSIC Performance and Credit ratings
  • Reservation policies to manufacturing / production sector
  • Very easy to get Licenses, approvals and registrations
  • Waiver of Stamp Duty and Registration Fees for land in backward area
  • Eligible for INDIAN PROMOTION SUBSIDY
  • Concession in electricity bills for land in backward areas.
  • Enterprises that have MSME registration can enjoy Direct Tax Exemption in the initial year of business, as mention in the scheme by Government and depending on business activity.
  • It can take credit for minimum alternate tax (MAT) to be carry forward for up to 15 years instead of 10 years.

Schemes Active for MSME sector
There are several schemes rolled out by the Government of India for catering to the development of the MSME Sector. Some of them are listed below. 
There are total 9 schemes active for MSME sector. For detail access one can visit:  https://msme.gov.in/all-schemes
Note: Under capital linked capital subsidy scheme (CLCSS)   an entity can claim 15% or Rs. 15 Lac Capital Subsidy on Automatic and Semi-Automatic Machines procured through bank finance.
To avail such benefits a further registration is required on www.msmedatabank.in.

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