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MSME Udyam Registration process and benefits: Step-by-step guide
Posted on Friday, December 9th, 2022 | By IndusInd Bank
The MSMEs, or the Micro, Small, and Medium Enterprises play a vital role in the economic growth of the developing nations. In the last five decades, MSMEs have helped India reduce economic disparity, rural-urban divide, and regional imbalances. The Indian MSME sector produces over 6,000 different products, which account for 45% of all industrial jobs, 50% of all exports, and 95% of the country’s industrial units.
To further strengthen the growth and development of the MSMEs, the Ministry of Micro, Small & Medium Enterprises offers a slew of benefits, schemes, programmes and reward-based competitions that offer a global-level exposure to registered MSMEs.
Before we discuss more about these incentives, let’s first take a detailed look at what the MSME registration actually is, and how can you register your enterprise using the Udyam portal.
The MSME Registration and the Udyam Portal
The Government of India has set up a comprehensive system to expedite and streamline the registration process of enterprises – known as the Udyam Registration. The Udyam Registration is a fully online, paperless process and is based on self-declaration. To motivate the MSMEs to register themselves, Udyam Registration is 100% free of cost.
It is important to remember that the Udyam Portal is the only portal to do MSME Registration or undertake any of the activity related with the process. No other private online or offline system, service, agency or person is entitled to register any MSME.
How to register your MSME on Udyam: Step-by-step guide
As of the latest data available in December 2022, more than 1.25 businesses have been registered under Udyam. The Udyam MSME registration is a fairly easy process, comprising of five simple steps. But before one begins the registration, it is advised to keep the following information handy
- Adhaar Number
- Permanent Account Number (PAN)
- Goods and Services Tax Identification Number (GSTIN)
- Bank Current Account
The PAN and GST linked details on investment and turnover of enterprise is taken automatically from the government database.
MSME Udyam Registration process:
The online MSME registration process is made incredibly simple and user-friendly by Udyogadharcertificate.in. For any business person, the MSME online registration process is straightforward and is as follows:
- Go to the MSME Registration website (udyamregistration.gov.in) and click on ‘Register here’ on the homepage.
- On the next page, enter your Aadhar details and click on ‘generate OTP.’ An OTP will be sent to the mobile number linked to your Aadhar.
- Once the OTP is verified, you will be redirected to the form.
- Fill the form with the required details and click ‘submit’ once you are done. Your MSME Registration application will be processed online once you click ‘submit’.
- Once the registration is complete, you will receive an ‘MSME Registration e-certificate’ on the email address you entered in the form. This usually takes 1-2 hours.
What are the benefits of MSME Registration?
Once you have registered your enterprise on Udyam, you can take advantage of tax benefits, subsidies, MSME loans, and much more. Here are a few advantages of MSME Udyam registration in India:
- Attractive interest rates on MSME loans– Bank loans for registered MSMEs are available at an attractive interest rate. There are certain small business and MSME lending programmes that don’t demand collateral to avail a MSME loan. IndusInd Bank offers a wide range of financial assistance to MSMEs with customized offers.
- 50% Off Patent Registration Fees- For the patent registration of their business idea and process, registered MSMEs are eligible for up to a 50% incentive. To use this government programme, a certificate of registered MSME registration is required.
- Waiver of Overdraft Interest Fee for MSME- A registered MSMEs can receive up to 1% discount on the interest they pay at any bank or financial institution.
- Eligibility for Industrial Promotion Subsidy- Under numerous government programmes, registered MSMEs can receive industrial promotion subsidies for spreading awareness of their firm around the world. This may involve receiving compensation for attending trade shows, marketing campaigns, and other events.
- Action against Postponed Payments- When a registered MSME provides goods or services to another company and the payment isn’t made within 45 days, the government gives the MSMEs the authority to levy compound interest on the unpaid balance each month. And the interest that must be paid is three times the rate that the RBI has authorized.
- Electricity Bill Subsidies- Particularly in the case of manufacturing facilities, registered MSMEs are also qualified for rebates on power bills in certain circumstances.
- No cost ISO Certification- The Indian government commits to cover all ISO registration fees in the event that a registered MSME obtains ISO certification. MSMEs which are not registered are not eligible for this refund.
- Long-Term Tax Benefits- Only registered MSMEs are eligible for the maximum 15-year extension of the minimum alternate tax (MAT) credit, as opposed to the standard 10-year extension for all other companies.
- Obtaining Government Tenders- Since the Udyam Registration Portal is directly connected to a number of government e-marketplaces and State Government’s portals for issuing tenders, registered MSMEs can receive additional assistance and a boost in acquiring government contracts.
The MSME sector in India is filled with immense potential. To strengthen their capacity and resilience, the Government of India has launched several programmes providing support to existing enterprises and encouraging the creation of new enterprises. The MSMEs are, and will continue to act as engines of sustained economic growth, equitable creation of opportunities and elimination of rural-urban divide.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.