MICRO SMALL &
MEDIUM SCALE ENTERERPISES REGISTRATION & BENEFITS UNDER MSMED ACT
The Micro Small & Medium
Enterprises Development (MSMED) Act 2006 was become operational from 2nd
October 2006. The Act replaces the
concept of “Industry” with “Enterprises”.
Consequent to the implementation of
this act, SSI Registration process has been dispensed with. The entrepreneur
files the Entrepreneur Memorandum and gets an acknowledgement..
Micro Small and Medium enterprises are defined as below:
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CATEGORY
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Investment in Plants & Machinery(Manufacturing Units)
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Investment in Equipment (Service
Sector)
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MICRO
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Up to Rs 25 Lacs
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Up to Rs 10 Lacs
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SMALL
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Rs 25 Lacs ≤ Rs 500 Lacs
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Rs 10 Lacs ≤ Rs 200 Lacs
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MEDIUM
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Rs 500 Lacs ≤ Rs1000 Lacs
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Rs 200 Lacs ≤ Rs 500 Lacs
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Further,
as per the said notification, the following are excluded while calculating
the investment in plant & machinery:
·
Equipments such as tools, jigs, dies,
moulds and spare parts for maintenance and the cost of consumable stores;
·
Installation expenditure for plant
& machinery;
·
Research & development equipment
and pollution control equipment;
·
Power generation set and extra
transformer installed by the
·
enterprise as per the regulations of
the state electricity board;
·
Bank charges and service charges paid
to the national small industries corporation of the state small industries
corporation;
·
Procurement or installation of
cables, wiring, bus bars, electricalcontrol panels (not mounted on individual
machines), oil circuitbreakers or miniature circuit breakers which are
necessarily to be used for providing electrical power to the plant &
machinery or for safety measures;
·
Gas producer plants;
·
Firefighting equipment;
·
Transportation charges (excluding
sales-tax or value added tax and excise duty) for indigenous machinery from the
place of their manufacture to the site of the enterprise;
·
Charges paid for technical know-how
for erection of plant & machinery and
·
Such storage tanks which store raw
materials and finished products only and are not linked with the manufacturing process.
·
Investment in land, building,
vehicles, furniture & fixtures, office equipments etc. shall not be
considered in determining the threshold limits of plant & machinery or
equipment as the case may be.
Filing of
Memoranda by MSMEs for registration
·
Process of two - stage registration of Micro
& Small Enterprises dispensed with & replaced by filing of memoranda.
·
Filing of memorandum optional for all Micro
& Small Enterprises.
·
Filing of memorandum optional for service sector
Medium Enterprises.
·
Filing of memorandum mandatory for manufacturing
sector Medium Enterprises
Benefits of Micro Small and Medium enterprises are defined as below:
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Act
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Benefits
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Micro
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Small
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Medium
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|
|
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Applicability(Yes/No)
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||
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Chapter V of the act
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Protection against delayed payments
by buyers of goods/services.
(Like Payment in 45 Days, Interest
on delayed payment @ 3 times of bank rate notified by RBI, In case of dispute
Reference to Micro and Small Enterprises Facilitation Council, Disclosure
Requirement to specify unpaid amount with interest in the annual statement of
accounts.)
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Yes
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Yes
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No
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Sec 9 of the Act
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Central Governments measures for promotion and development of MSME.
(Like development of skill in the employees, management and
entrepreneurs, provisioning for technological upgradation, providing
marketing assistance or infrastructure facilities and cluster development of
such enterprises with a view to strengthening backward and forward linkages)
|
Yes
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Yes
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Yes
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Sec 10 of the act
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Credit facilities.
(Like RBI’s
progressive credit policies for ensuring timely and smooth flow of credit,
minimise the incidence of sickness among and enhance the competitiveness of
such enterprises)
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Yes
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Yes
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Yes
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Sec 11 of the Act
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Procurement Preference
policies notified by
Central/ state government
(Like procurement of goods and
services, produced and provided by micro and small enterprises, by its
Ministries or departments, as the case may be, or its aided institutions and
public sector enterprises.)
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Yes
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Yes
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No
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Sec 12 of the Act
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Funding Facilities or Grants by
Central Government.
(Like after due appropriation made by Parliament by law in this behalf,
credit to the Fund or Funds by way of grants for the purposes of this Act,
such sums of money as that Government may consider necessary to provide)
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Yes
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Yes
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Yes
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Sec 25 of the act
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Simplified exit scheme (winding up the business) but NA to companies
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Yes
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Yes
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Yes
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