Frequently Asked Questions

1)What is the definition of MSME?

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under: MSME Registration & GST Registrations is Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:

MSME Is a micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh;
A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore;
A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.

2)Is Aadhaar Number mandatory for online MSME Registration?

At present Aadhaar Number is mandatory for issuance of MSME Certificate.

3)Is physical copy of Certificate will be issued?

In the interest of environment no physical copy of MSME Certificate will be issued. Government believes in paperless work.

4)What is the support available for technology upgradation?

Ministry implements a scheme called Credit Linked Capital Subsidy Scheme (CLCSS) for technology upgradation of Micro and Small enterprises in the country. Under the scheme, 15 per cent capital subsidy, limited to maximum of Rs 15 lakh (12 % prior to 29.09.2005 limited to maximum of Rs 4.8 lakh) is provided to the eligible MSMEs for upgrading their technology with the well-established and improved technology as approved under the scheme. 48 products/sub-sectors have been approved under the CLCSS till date. If you are an MSME manufacturing a product and want to upgrade the technology of manufacturing the product with the well-established and improved technology as approved under the Scheme, then you may have to approach to the nodal agencies/eligible financial institution for sanction of term loan for purchase of eligible machinery.

5)How do banks assess the working capital requirements of borrowers?

The banks have been advised by RBI to put in place loan policies governing extension of credit facilities for the MSME sector duly approved by their Board of Directors Vide RBI circular; Banks have, however, been advised to sanction limits after proper appraisal of the genuine working capital requirements of the borrowers keeping in mind their business cycle and short term credit requirement. As per Nayak Committee Report, working capital limits to SSI units is computed on the basis of minimum 20% of their estimated turnover up to credit limit of Rs.5crore. For more details paragraph 4.12.2 of the RBI Master Circular on lending to the MSME sector dated July 1, 2010 may please be seen.

6)What are the chances of rejection of Online MSME Application?

Every application will be approved. No application will be rejected. Application will be approved on the basis of information provided by applicant.

7)When MSME Registration Certificate will be issued?

After filing online msme application form, MSME Registration Certificate will be issued immediately at email

8)What support is provided by the Ministry for participation of MSMEs in international events?

Under the International Cooperation Scheme, financial assistance is provided on reimbursement basis to the State/Central Government organizations, industries/enterprises Associations and registered societies/trusts and organizations associated with MSME Registration & GST Registrations for deputation of MSME business delegation to other countries for exploring new areas of MSMEs, participation by Indian MSMEs in international exhibitions, trade fairs, buyer seller meet and for holding international conference and seminars which are in the interest of MSME sectors. Eligible beneficiary organizations can apply to the Ministry directly to avail the assistance under IC Scheme as per Scheme Guidelines.

Benefits of MSME:

1)Collateral Free loans from banks:

The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) was launched by the Government of India to make available collateral-free credit to the micro and small enterprise sector. Both the existing and the new enterprises are eligible to be covered under the scheme. The Ministry of Micro, Small and Medium Enterprises, Government of India and Small Industries Development Bank of India (SIDBI), established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement the Credit Guarantee Fund Scheme for Micro and Small Enterprises.

2)Reservation policies to manufacturing / production sector:

Reservation of items for exclusive manufacture in SSI sector statutorily provided for in the Industries (Development and Regulation) Act, 1951, has been one of the important policy measures for promoting this sector.

The Reservation Policy has two objectives

Ensure increased production of consumer goods in the small scale sector
Expand employment opportunities through setting up of small scale industries.

3)Very easy to get Licenses, approvals and registrations:

It has made very easy for enterprises that are having MSME Certificate to obtain Licenses, approvals and registrations on any field for their business from the respective authorities as they can produce the Certificate of MSME Registration while making application.

4)Exemption under Direct Tax Laws:

Enterprises that have MSME Registration can enjoy Direct Tax Exemption in the initial year of business, as mention in the scheme by Government and depending on business activity.

5)Bar Code registration subsidy:

Enterprises that have MSME Registration can avail Bar Code Registration subsidy as mentioned in the scheme.

6)Subsidy on NSIC Performance and Credit ratings:

Enterprises that have MSME Registration can avail Subsidy on NSIC Performance and Credit ratings as mentioned in the schem.

7)Eligible for IPS subsidy :

Enterprises that have MSME Registration are eligible for Industrial Promotion Subsidy (IPS) as mentioned in the schem.

8)Counter Guarantee from Government of India through CGSTI:

Enterprises that have MSME Registration are eligible for Counter Guarantee from Government of India through CGSTI.

9)Concession in electricity bills:

Enterprises that have MSME Registration Certificate can avail Concession on electricity bill by making application to electricity department along with MSME Registration Certificate

10)Reimbursement of ISO Certification:

Enterprises that have MSME Registration Certificate can reimburse ISO Certificate Expenses by making application to respective authority along with MSME.

11)Preference in procuring Government :

Enterprises that have MSME Registration & GST Registrations have preference in procuring government tenders. Special treatment is given to MSME Registered organization while making application for government tenders.

12)Excise Exemption Scheme:

Enterprises that have MSME Registration & GST Registrations can enjoy Excise Exemption in the initial year of business, as mention in the Excise Exemption scheme by Government and depending on business activity.

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