5. MSME INTRODUCTION:
MSME stands for:
M = Micro,
S = Small and
M = Medium
E = Enterprises.
Types of MSME:
1. Manufacturing Enterprises and
2. Services Enterprises.
Trading Enterprises are not covered under
MSME.
MSME explained by
CA Akash G Jadhav
6. 1. In a developing country like India,
MSME industries are the backbone of the
economy.
2. MSMEs are contributing to exports, increasing
manufacturing sector production and extending
support to bigger industries by supplying raw
material, basic goods, finished parts and
components, etc.
3. MSMEs has also providing employment to a large
number of unskilled and semi-skilled people.
MSME INTRODUCTION:
MSME explained by
CA Akash G Jadhav
MSME explained by
CA Akash G Jadhav
MSME explained by
CA Akash G Jadhav
7. Classification of MSMEs:
W.e.f. 01.07.2020, MSMEs has been classified on the
basis of :
1. The value of Investment in plant and
machinery or equipment
And
2. Annual Turnover.
MSME explained by
CA Akash G Jadhav
8. PLANT & MACHINERY
1. Original price
2. Import duty
3. Shipping charges
4. Customs clearance
charges
5. GST
1. Equipments such as tools,
jigs, dies, moulds & spare
parts
2. Installation of Plant and
Machinery
3. R&D and pollution control
equipment
4. Bank charges and service
charges paid
5. Transportation charges
INCLUDED EXCLUDED
MSME explained by
CA Akash G Jadhav
9. Definition of MSME changed vide notification of 1stJune 2020-effective
1stJuly 2020:
1. Investment limit for MSMEs revised upward.
2. Criteria based on turnover to define MSMEs also added.
3. Investment and turnover criteria now a combined condition.
4. Merged criteria applicable for both manufacturing and service
MSMEs.
5. Investment-is defined to cover only Plant and Machinery/
Equipment. So other assets like Land, Building, etc. continue to
remain excluded for calculation.
MSME explained by
CA Akash G Jadhav
12. Procedure for registration
1. The registration provisions are in Section 8 of the MSMED
Act.
2. It requires the Medium Enterprises engaged in
Manufacturing to get compulsory registration-while other
categories have option to register.
3. If any person contravenes the above provision than penalty
of Rs1,000/-can be levied at first time. This penalty can be
increased up to Rs10,000/- on subsequent contravention.
Notified Authority for this purpose is “DISTRICT
INDUSTRIES CENTER” and memorandum is popularly
known as “UDYOG AADHAR”
MSME explained by
CA Akash G Jadhav
13. Procedure for registration
1. A one-page simple registration form for online filing of Udyog
Aadhar Memorandum (UAM)
2. The filing of UAM can be done on http://udyogaadhaar.gov.in/
3. The features of Udyog Aadhaar are:
a. Registration is online and user-friendly.
b. UAM can be filed on self-declaration basis.
c. No documentation required.
d. No Fee for filing.
e. File more than one Udyog Aadhaar with same Aadhaar
Number.
MSME explained by
CA Akash G Jadhav
17. Guidelines for Filling the Online Udyog Aadhaar Form
1. Aadhaar Number.
2. Name of Owner.
3. Social Category.
4. Gender.
5. Physically Handicapped.
6. Name of Enterprise.
7. Type of Organization.
8. PAN Number.
9. Location of Plant.
10. Official Address.
11. Date of Commencement.
12. Previous Registration.
13. Bank Details.
14. Major Activity- i.e. “M/ "S”
15. NIC Code.
16. Person employed.
17. Investment in P & M or E.
18. Submit.
19. Enter OTP.
20. Enter Captcha
MSME explained by
CA Akash G Jadhav
21. BENEFITS OF MSME REGISTRATION:
A. MSME can avail 50% subsidy for Trademark, Patent
registration by making application to respective ministry.
B. MSME can avail benefit of 1% exemption on interest
rate on Over Draft. (But it depends on Bank to Bank).
C. Preference in Government tenders and waiver in EMD
required for contracts.
MSME explained by
CA Akash G Jadhav
22. BENEFITS OF MSME REGISTRATION:
D. Government procurement tenders up to Rs. 200
crore will no longer be open to global tenders /
players.
E. MSME can apply to respective department for
reimbursement of ISO Certification Charges.
F. Government will support Market assistance and
export promotion.
G. Government is providing subsidies, tax exemption
and technical support to MSMEs.
MSME explained by
CA Akash G Jadhav
23. BENEFITS OF MSME REGISTRATION:
H. Technology and quality upgradation support to
MSMEs:
To manufacture the product up to the mark or as
per certain standard, MSME needs to upgrade
technology. In this scenario, Government will
reimburses all expenditure incurred by MSME on
the technology and quality upgradation.
I. Eligible for Industrial Promotion subsidy
J. Concession in Electricity Bills.
MSME explained by
CA Akash G Jadhav
24. K. Protection against
delayed payments:
1. Protection against delayed payments from the buyers and right of
Interest for delayed payment.
2. If any micro or small has MSME registration Certificate and
supplies any type of goods or services, then the Purchaser is
required to make payment on or before the date agreed
upon between the purchaser and the micro or small enterprise.
4. The financial statements of the buyer has to disclose amounts due
separately.
3. Section 15 and 16 of MSMED Act provides right to MSME to receive
payments within 45 days –in the event of failure the Buyer liable to
pay three times the Bank rate notified by RBI compounding
monthly.
5. Time bound resolution of disputes through conciliation and
Arbitration.
MSME explained by
CA Akash G Jadhav
25. L. Collateral Free Business loans from banks
1. The Credit Guarantee Fund Scheme for Micro and Small
Enterprises (CGS) was launched by the GOI to make
available collateral-free Loans to the micro and small
enterprise sector.
2. Both the existing and the new MSME enterprises are
eligible to be covered under the scheme.
3. The Ministry of Micro, Small and Medium Enterprises,
Government of India and Small Industries Development
Bank of India (SIDBI), established Credit Guarantee
Fund Trust for Micro and Small Enterprises (CGTMSE)
to effectively implement the Credit Guarantee Fund
Scheme for Micro and Small Enterprises.
MSME explained by
CA Akash G Jadhav
31. Other schemes where MSME are eligible for support/
subsidy/ reimbursement :
Scheme : 1
Financial Support to adopt Zero Defect Zero Effect Manufacturing
(ZED certification)
Support
Financial assistance by way of reimbursement for National and
International Standards
Remarks
Scheme for State/ UT
MSME explained by
CA Akash G Jadhav
32. Other schemes where MSME are eligible for support/
subsidy/ reimbursement :
Scheme: 2
Lean Manufacturing techniques through intervention in cluster of 4 -
10 MSMEs
Support
Financial assistance uptoRs. 36 lakhs per cluster of 10 MSME
Remarks
To Increase competitiveness
MSME explained by
CA Akash G Jadhav
33. Other schemes where MSME are eligible for support/
subsidy/ reimbursement :
Scheme: 3
Design Scheme
Support
Financial assistance for engagement of design consultants for
design intervention
Remarks
Project range of Rs. 15 lakhs to Rs. 40 lakhs also assistance of Rs.1.5
lakhs for student for project
MSME explained by
CA Akash G Jadhav
34. Other schemes where MSME are eligible for support/
subsidy/ reimbursement :
Scheme: 4
IPR –Trademarks, Patents, Design Copy rights and GI
Support
Financial assistance up to Rs. 1 cr for filing IP and legal cost. Also
reimbursement for acquiring patent
MSME explained by
CA Akash G Jadhav
35. Other schemes where MSME are eligible for support/
subsidy/ reimbursement :
Scheme: 5
Credit linked Capital Subsidy
Support
15% of upfront capital subsidy for Technology upgradation –whether
new or old unit-whether with or without expansion
MSME explained by
CA Akash G Jadhav
48. Champion’s Portal Inaugurated by the Honourable PM on 1stJune 2020 :
https://champions.gov.in/
MSME explained by
CA Akash G Jadhav
49. 1. To help the MSMEs in this difficult situation in terms of
finance, raw materials, labour, permissions, etc.
2. To help the MSMEs capture new opportunities including
manufacturing of medical items & accessories.
3. To identify the sparks, i.e., the bright MSMEs who can
withstand at present and become national and international
champions.
MSME explained by
CA Akash G Jadhav
50. 1. It is a technology packed control room-cum-management information system.
In addition to ICT tools including telephone, internet and video conference,
the system is enabled by Artificial Intelligence, Data Analytics and Machine
Learning. It is also fully integrated on real time basis with GOI’s main
grievances portal CPGRAMS and MSME Ministry’s own other web based
mechanisms. The entire ICT architecture is created in house with the help of
NIC at no cost. Similarly, the physical infrastructure is created in one of
ministry’s dumping rooms in a record time.
2. As part of the system a network of control rooms is created in a Hub & Spoke
Model. The Hub is situated in New Delhi in the Secretary MSME’s office. The
spokes are in the States in various offices and institutions of MSME Ministry.
As of now, 66 state level control rooms are created and made functional. They
are connected through video conference also, in addition to the portal of
Champions. A detailed standard operating procedure(SOP) has been issued to
the officers and staff have been deployed and training has been conducted for
them.
MSME explained by
CA Akash G Jadhav
53. FREQUENTYLY ASK QUESTIONS ON
MSME:
Q. Is Aadhar card compulsory?
A. Yes.
In case of Proprietor : Proprietor’s
In case of Partnership Firm : Any Partner’s
In case of Company : Any Director’s
MSME explained by
CA Akash G Jadhav
54. FREQUENTYLY ASK QUESTIONS ON
MSME:
Q. Can existing and new businesses both
apply?
A. Yes.
An existing and new business can apply for
MSME. Provided the existing unit is
functioning and meets the threshold limits for
registration.
MSME explained by
CA Akash G Jadhav
55. FREQUENTYLY ASK QUESTIONS ON
MSME:
Q. What is the validity of the Certificate?
A. There is no expiry of the Udyog Aadhar
Certificate.
As long as the entity is ethical & financially
healthy there will be no expiry of the
certificate.
MSME explained by
CA Akash G Jadhav
56. FREQUENTYLY ASK QUESTIONS ON
MSME:
Q. Can trading companies register under
MSME?
A. No.
MSME covers only manufacturing and service
industries. Trading companies are not covered by
the scheme. MSME is to support startups with
subsidies and benefits, trading companies are just like
middlemen, a link between manufacturer and
customer. Hence not covered under the scheme.
MSME explained by
CA Akash G Jadhav
57. FREQUENTYLY ASK QUESTIONS ON
MSME:
Q. Do I need multiple registrations for
manufacturing plants in different
cities?
A. No.
The MSME is for a single entity irrespective of
multiple branches or plants. However,
information about multiple branches or plants
must be furnished.
MSME explained by
CA Akash G Jadhav
58. Disclaimer:
The information contained in the above video are
solely for informational purpose after exercising
the due care and is on based on the speaker’s
interpretation of the relevant provisions. The
speaker accepts no responsibility whatsoever and
will not be liable for any losses, claims or
damages which may arise because of the contents
of this video.
MSME explained by
CA Akash G Jadhav