MSME CERTIFICATE

1. Interest rates for MSME registered enterprises are lower than the regular loans -1% to 1.5%.

2. MSME certificate holders can enjoy tax exemption under the MSME Act.

3. Minimum Alternate Tax (MAT) can be extended to 15 years from the regular 10 years.

4. Preferred for Government-issued license and certificates.

5. Rebates and concessions reduce the cost of patenting and industry setup.

6. Many Government tenders are given to only MSME registered enterprises.

7. Easy access to credit.

8. Reduction in electricity bill by contacting the electricity department with proper documents.

9. Reduction in ISO charges paid on ISO certification of the product.

10. If involved in the import-export business, you can attend various international forums, exhibitions, and fairs with an MSME certificate.

Main Objectives of MSME:

1. It provides large-scale employment opportunities with relatively low investment.

2. To spread industries all over the country covering small towns, villages, and economically backward regions.

3. To promote balanced regional development in the whole country.

4. To encourage the effective mobilization of country’s untapped resources

5. Promoting Competitiveness and productivity in the MSME space.

6. Making the MSME Sector innovative, improving technology and depth.

7. Enabling the environment for the promotion and development of MSMEs. 

8. Strong presence in exports.

9. Improve managerial processes in MSME.

10. To improve the level of living of people in the country.

Compliance of MSMEs with GST:

Each registered identity has to apply for a GSTIN. GSTIN would be specified in every business transaction explaining the flow of goods and services, GST collected and paid, etc. 

For an MSME to be registered under GST have to apply online on the GST portal along with the following documents:

1. Certificate of MSME Registration.

2. Existing Service Tax/VAT/CST/Excise Registration details.

3. Proprietor PAN details.

4. Bank account details opened in the name of the business.

5. Aadhaar details of the proprietor.

6. Address proof of business.

7. Other documents as specified by the government.

Benefits of GST to MSME:

1. Reduction of a multiplicity of taxes: With the summation of all taxes to GST, MSMEs would not be required to provide different tax registration details and would be able to pursue a restriction-free trade.

2. Elimination of cascading effect of taxes: With the removal of tier-based addition of taxes to goods and services at different levels, a proprietor in most cases has to face the double payment of taxes which was seeking to add additional cost to business. But with GST, a complete record is being maintained of all taxes paid, charged, and received. Thus to a great extent, it removed the cascading effect for the business sector.

GST Exemption:

For registration and payment of GST, there are two threshold limits for exemption. This exemption is applicable only to MSMEs which deal with the supply of goods. The limits are Rs. 40 Lakhs and Rs. 20 Lakhs and states will be given the option to decide the limit. The threshold for service provider MSMEs will continue to be Rs. 20 Lakhs, in special category states this threshold will be Rs. 10 Lakhs. In relation to composition schemes, a scheme will be made available for suppliers of services or mixed suppliers, with a tax rate of 6% and having an annual turnover below Rs. 50 Lakhs.  Further, the annual turnover limit of MSMEs for availing composition schemes for goods shall be increased to Rs. 1.5 Crores. There will be only one tax return for MSMEs who opt for composition schemes. 

As per GST Law, the following conditions needs to be fulfilled for transacting with GST:

1. The annual turnover of business should be more than Rs. 20 Lakhs in a financial year (Rs. 10 Lakhs for North Eastern and Hilly states.

2. For businesses engaged in interstate supply, input services, e-commerce operations, agencies dealing with suppliers.

3. The person supplying Online Information and Database Access or Retrieval Services from a place outside India to a person in India, other than a registered taxable person.

4. For entities that are earlier registered for other tax liabilities like Excise Duty, Service Tax, etc also have to get registered under GST .

5. For business, units counter under the definition of Reverse Charge Mechanism.

Udyog Aadhaar Registration Certificate:

Udyog Aadhaar for business is a 12 digits registration number provided by the Ministry of MSME and Government of India to small and medium enterprises on registration of their business. It was introduced in 2015 for the easy process of registration of these enterprises as prior to the Udyog Aadhaar, the registration process was a tedious process and required separate registration for small industry and MSME. The registration process involve almost 11 different forms along with necessary attested certificates under the system of EM-I/II (Entrepreneur Memorandum)