The MSME industry is growing significantly due to the constant support from the Indian Government. This has further inspired everyone, especially the youth, to explore their entrepreneurial side and start their own venture.
However, in such cases, knowledge regarding MSME and MSME registration benefits are a must to know.
5 reasons why MSME registration is beneficial for small businesses
1. Overdraft facility along with Interest Rate Exemption
Businesses or enterprises registered as MSME under the MSME Act are eligible to avail a benefit of 1% on the overdraft as part of the Credit Guarantee Trust Fund Scheme. Although this can vary from bank to bank.
Under the Interest Equalization Scheme on Pre and Post Shipment Rupee Export Credit, the Interest Equalization @ 5% per annum is available to all MSME exporters across all their merchandise exports. This scheme have been extended till 31/03/2021.
3. Subsidy on Patent Registration
Business enterprises registered under the MSME Act are given a subsidy for patent registration. This can be availed by sending an application to the respective ministry.
4. ISO Certification Charges Reimbursement
A registered small or medium enterprise can claim the expenses for reimbursement that were spent on ISO certification to the extent of 75% of expenditure, subject to a maximum of Rs.75,000/-.
5. Protection against Delayed Payments
Understanding the ambiguity lying with business revenues, the Government has extended a helping hand by providing a layer of protection against payments. If the buyer delays, the payment for more than 45 days, notwithstanding anything contained in any agreement between buyer and seller or in any law for the time being in force, the enterprise is eligible to charge compound interest which is 3 times the rate notified by RBI.
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