The benefits of MSME registration are many. If you have started a small business, you know that it is not easy to become registered. The process is not as simple as it seems and it takes quite a lot of time which is why many businessmen are stuck learning about the registration process or finding out about the best pf calculator online. However the benefits that you get as a result more than makes up for it.
MSMEs are the backbone of a country’s economy. They are small and medium-sized enterprises which employ thousands of individuals. These companies also help in creating jobs for others, as they buy products from other manufacturers and sell them in the market.
The government of India has identified some benefits under MSME registration that can help entrepreneurs while they are setting up their companies:
1. Loans without collateral
The MSMEs are eligible to get a collateral-free loan from the banks without any security deposit. The bank will give you a loan according to your credit history and the business plan of your company. The interest rate varies every month and depends on the bank’s policy.
2. Overdraft Interest Rate Exemption
Every bank has a set limit on how much interest it can charge when taking out loans from its customers. However, if an MSME is registered with RBI then it does not need to pay any interest for taking out any loan from banks or finance companies as long as its balance stays within the limit set by RBI for credit limits under microfinance
3. Patent Registration Subsidy:
The registration process of the patent is not cost-free and has its own cost at a discount of 50%. The government provides a subsidy to help you pay the registration fee. You can get this subsidy either in a lump sum or as an instalment.
4. Protection against Delayed Payments
The registration will protect payments for goods or services being provided to a new customer who has not been registered with the MSME department before making the payment. This means that if a new customer who has not been registered before makes a payment artdailynewsonline, it will be held in escrow until they are registered as well. Once they are registered, they can claim their money back from the government.
5. Exemption under Direct Tax Laws
The MSMEs are entitled to exemption under certain provisions of Direct Taxes Laws such as central excise duty, service tax etc. However, registration as an MSME is mandatory before availing of these benefits.
6. Fewer Electricity Bills
MSMEs often face difficulty in getting electricity connections because of their small size and lack of capital base required to install power transformers or buy poles and wires directly from the government authorities. This issue has been addressed by providing an exemption from purchase irtdaily.
7. Tax Benefits
Most entrepreneurs find it difficult to pay tax because they have limited resources to pay it from their own pockets or borrowed money from banks or financial institutions businesslognews. However, once you register your company under MSME, you become eligible for several tax benefits like deduction at source (DAS), input tax credit (ITC) as well as deductions for interest on loans taken from banks or financial institutions etcetera. To get an accurate estimate of your tax benefits you can use things like GST calculator Karnataka or anywhere else in India and other such calculators.