Benefits available to MSME
Bank loan (collateral-free)
The government of India has made collateral- free loan credit available to all enterprises which are registered under MSME. It means MSME can avail the benefit of bank loan without pledging its property or assets.
Exemption on the interest rate on OD
Entities which are registered under MSME get 1% exemption on interest rate on Overdraft (OD) and in case of other loan get loan at concessional rate of interest.
Subsidy on Patent Registration
MSMEs registered with the MSME ministry stand to benefit from a 50% subsidy on their patent registration fees. This encourages small businesses and firms to keep innovating and working on new projects and technologies.
Protection against Payment
If any buyer purchases goods or services from registered MSMEs then he is required to make the payment on or before the agreed date of payment or within 15 days from the day they had accepted the goods or services. If the buyer delays the payment for more than 45 days after accepting the products or services then the buyer has to pay Compound interest on the amount that was agreed to be paid. The interest rate is three times the rate that is notified by the Reserve Bank of India.
Concession on Electricity bills
Entities which are registered under MSME are entitled to concession on their electric bill. This enables businesses to boost production and take in more orders without worrying about capital expenditure on costs like electricity and maintenance.
ISO Certification Charges Reimbursement
Any registered micro, small and medium enterprise can claim reimbursement of the expenses that were made in order to obtain an ISO certification.
Industrial Promotion Subsidy
MSMEs can avail industrial promotion subsidies for purchasing plant and machinery which helps them upgrade their technology and machinery.
Priority while Applying for Licenses and Approvals
Those businesses who present a Certificate of MSME Registration when applying for licenses, permits, or registrations from the appropriate authorities in any field for their business are given priority and the procedure is streamlined for them.
No Income Tax for Startups
For three years out of seven, no income tax is payable - that is, startups are entitled to a 100% tax exemption on profits for the initial three out of seven years, as long as their annual revenue in a fiscal year does not exceed Rs 25 crores.
Protection of Section 43B(h) of The Income Tax Act
As per this new section if payment is not made by Income Tax Assessee to Micro and small entities within 15/45 days then same is allowed while calculating income tax on payment basis only.
MSMEs can apply for Government Tender easily
MSMEs registered under this Registration are permitted to participate in government tenders and can avail of exemption like no need to deposit security.
The Central Government Benefits
The central government has introduced various beneficial schemes for MSMEs such as Atma Nirbhar Bharat, credit guarantee scheme, Quality management standard & quality technology tools, women entrepreneurs, zero effect and zero defects, and many others.
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