MSME Udyam Registration Benefits | Reasons to Obtain Udyam Registration
Micro, Small and Medium Enterprises are offered a lot of benefits by the government. In FY 2020, the MSME sector contributed 30% of the Indian GDP. The contribution of MSME is immense to the Indian economy and therefore, to further boost the MSME sector, the Government of India earmarks funds and launches various schemes. However, to claim the benefits of such schemes, it is important for such businesses to get registered as an MSME in India.
In India, Udyam registration is the valid MSME registration for businesses. If you want to get registered as MSME in India, then you shall apply for Udyam registration. Further, to boost the ease of doing business in India, the government has made the entire process of Udyam registration online. If you are wondering what are the benefits of Udyam registration, let’s check it out!
Benefits of Udyam Registration
Following are the benefits of Udyam registration in India:
- Collateral Free Loans: The government launches various schemes to provide collateral-free loans to the MSME sector. If you have obtained Udyam registration for your MSME business, then you can claim the benefit of such government schemes.
- Interest Concession on Loans: Banks provide concessions on loans provided to the MSME sector under various schemes. The concession can be claimed across various types of financing facilities like cash credit, business loans, overdrafts etc. One of the benefits of Udyam registration is that it is the valid certificate to establish your business as a MSME business thereby enabling access to such concessional loans.
- Subsidy on Intellectual Property Registrations: It is important to protect the intellectual property rights of the business. However, in the initial stages of business, applying for intellectual property rights can be a little cumbersome and costly. Being registered as an MSME or a startup can provide you assistance and subsidy in your intellectual property registrations like patents, trademarks etc.
- Business Incubator Facilities: The startups and MSMEs can avail of the facilities of business incubators that provide businesses with an environment and relevant resources to innovate and develop business ideas, products, processes, technology etc. and commercialise as soon as possible.
- Exemption on Excise Duties: The government also provides excise exemption in the initial years of the business to the MSMEs and startups that depend upon their business activities.
- Subsidy on CLCSS: Also known as Credit Linked Capital Subsidy Scheme (CLCSS), this scheme was launched by the Ministry of Micro, Small and Medium Enterprises (MSME) to help businesses upgrade technologically. The MSMEs can claim up to 15% of the subsidy for technology upgrades.
- Support in Case of Delay in Payments: The Ministry of MSMEs has always provided support to the MSME businesses in case of delays in payments. Further, the MSMEs can always avail of the facility of arbitration, mediation or conciliation in case of disputes between the parties. Also, a provision has been inserted in the Companies Act 2013 whereby if a company makes a delay of more than 45 days in payment to an MSME organisation from the date of acceptance or deemed acceptance of goods, then such companies are required to furnish the details in Form MSME-1.
- Relaxation in Income Tax Laws: Startups and certain MSMEs are provided various relaxations under the income tax law. Further, startups are also eligible for claiming tax holidays as per the provisions of the law.
- Policies For MSME Sectors: The government drafts certain policies as well as insert beneficial provisions in the taxation laws in a bid to promote and boost the MSME sector in India. One of the initiatives is Atmanirbhar Bharat that aims to boost the local production and manufacturing to reduce dependence on imports.
In a Nutshell
As you can see, there are multiple benefits of Udyam registration. In a bid to promote ease of doing business, the applicants can now apply for MSME Udyam registration online. From checking status, downloading certificate, changing and updating Udyam details or cancellation of certificate – everything can be done online. Obtain your MSME certificate now!
Author : Dipen
Date : 13-Jul-2022