MSME is an abbreviation for Micro, Small and Medium Enterprises. This form of entity is used by small scale industries and businesses. The majority of India has predominantly engaged in this sector apart from the Agriculture sector. Ever since Independence, this sector has developed at a rapid pace. This article is crucially going to analyse the benefits of MSME registration in India. What is MSME Registration? It is a process in which the entity secures all the requirements to be in compliance with the laws of the land. This form of registration is crucial for all business entities engaged in the MSME and SSI sectors. Before we delve into the benefits of the MSME sector, let us first understand the eligibility criteria for MSME Sector. Eligibility for MSME Registration The following eligibility criteria are required for the said registration in India: Sl NoType of MSMEInvestment in Plant and MachineryTurnover Criteria1Micro Enterprise Rs. 1 CroreRs. 5 Crore2Small EnterpriseRs. 10 CroreRs. 50 Crore3Medium EnterpriseRs. 50 CroreRs. 250 Crore The above table provides the eligibility criteria for MSME registration in India. This turnover ratio has been amended by the Finance Ministry Several times. In June 2020, this amendment came out with new criteria to suffice the requirement to start an MSME in India. Benefits of MSME Registration in India All types of entities are eligible to form an MSME. Be it a sole proprietorship company or a private limited company, all entities are allowed to carry out the registration process of the same. The following are the benefits of MSME registration in India: Securing Bank Loans- It is seamless to secure bank loans with registered MSMEs. Securing a bank loan from any public sector undertaking is not straightforward. Apart from this, there are a lot of processes and paperwork while dealing with a bank loan. Hence through registration, securing this form of loan would not take time. Loan processing through the bank would be faster with fewer problems. With registration, any form of the institution can provide a loan to an MSME.Growth Opportunities- The registration will not only reduces the processing time for loans but also enhances growth opportunities for the MSME. A registered MSME has added benefits such as securing government contracts, expansion plans within India, and participating in international and other export-oriented fairs. Moreover, registered MSMEs are reputed in the eyes of the public. These benefits would not be available for unregistered MSMEs.Tax Exemptions- As this sector is mainly a priority sector in India; more exemptions would be available to MSMEs. For example, it may allow the particular entity to avail and claim some form of tax credit and rebates. Apart from this, some form of exemptions would be available under the Income Tax Act, 1961 for MSME. Hence to claim some form of tax exemptions, it would be beneficial for MSMEs to register.Minimum Alternative Tax (MAT) - Minimum alternative tax is a form of benefit which is allowed to be carried forward by an entity. Usually, entities utilise this process to carry forward tax for a minimum period of 10 years. However, registered MSMEs are allowed to carry forward this tax for a period of more than 15 years. Due to this, it is beneficial to go for MSME registration.Government Tenders- Usually when tenders are advertised, they would only be allocated to a limited amount of participants. It will allow the entity to actively take part in government tenders. Through this process, there can be phenomenal growth potential for the MSME.Claims Exemptions for Government Certifications- MSME registration allows the entity to claim some form of exemptions for government certifications. For example, any ISO certification fee and application can be reimbursed from the MSME. Hence the said registration process would be suitable if the applicant wants to claim some form of reimbursement for the certification.Credit Facilities- MSME registration qualifies different from of credit facilities to the entity. A registered MSME can utilise credit facilities provided by any form of bank or public sector undertaking. However, an unregistered MSME does not have any benefits regarding credit facilities offered.Reputation- MSME which is registered would have more recognition. Apart from this such MSMEs are more reputed in the eyes of the public. This is not only the case for securing any form of loans, but even for other purposes MSMEs are recognised.All Entities- Another benefit will also entail entities to utilize the advantages that are offered through this form of registration. There is no limitation regarding the registration for any particular entity. Hence an applicant needs to consider all the above benefits in mind when it comes to MSME registration process. Conclusion From the above, it is beneficial to go for MSME registration process as there are lot of benefits. Some of the benefits include tax incentives, government schemes, and exemptions. Read our article:Detail Explanation about MSME Registration Process & Who Need to Register?