What Is MSME
MSME stands for micro, small and medium enterprises. They have always been the backbone of developing country like India. MSMEs are small business entities that are referred as engine of economic growth due to their contribution to employment, exports and production and GDP. The Government of India supports and Promote MSMEs through various schemes and offers which include cheaper bank loans, tax rebates, setting up the business and easy access to credit under the MSMED Act. MSME Registration has not been made mandatory yet however, in order to avail the benefits under the MSMED Act, registration is a must.
In February 2018, the Union Cabinet approved amendment to MSME act to change the classification of MSME. In previous classification, it was done on the basis of investment in plant, machinery criteria and separate method was applicable on service units. Now, as per this new classification, the MSMEs are categorized on the basis of turnover and same methodology is applicable for both manufacturing and service units. It is a big relief that will greatly improve transparency of the MSME sector and better suit the GST and other Networks.
Classification of MSMEs
- Micro Enterprise: An enterprise where annual turnover does not exceed Rs. 5 crore.
- Small Enterprise: An enterprise where annual turnover is more than Rs. 5 crore but does not exceed Rs. 75 crore.
- Medium Enterprise: An enterprise where annual turnover is more than Rs.75 crore but does not exceed Rs.250 crore.
Documents Required for MSME Registration
- Pan and Aadhar card of the applicant
- Business Pan card (Applicable in case of Company, LLP & Partnership)
- Cancelled Cheque
- Certificate of Registration (Applicable in case of Company, LLP & Partnership)
- Business Address Proof