Registration of an existing or proposed small scale enterprise is voluntary and not compulsory. It has no statutory basis. But, registration is beneficial for the enterprise itself because it makes the unit eligible for availing the benefits given by the Central or State Governments for the promotion of SSIs. Some of the incentives so obtained by them relate to credit guarantee scheme; priority sector lending; capital subsidy; reduced customs duty; ISO-9000 certification reimbursement; power tariff subsidies; exemptions under tax laws; etc.
The State Directorate or Commissioner of Industries or District Industries Centers (DIC’s) are the concerned authorities for registration of small scale units. This registration is both location specific and product specific.
MSME enterprises of manufacturing sector can be categorized on the basis of amount invested in plant and machinery –
- Micro enterprises– Entities investing less than ₹ 25 lakhs in plant and machinery
- Small enterprises– Entities investing between ₹ 25 lakhs and ₹ 5 crores in plant and machinery
- Medium enterprises– Entities investing between ₹ 5 crores and ₹ 10 crores in plant and machinery
MSME enterprises in the service sector can be categorized on the basis of amount invested in equipment-
- Micro enterprises– Entities investing less than ₹ 10 lakhs
- Small enterprises– Entities investing more than ₹ 10 lakhs but less than ₹ 2 crores
- Medium enterprises– Entities investing ₹ 2 crores but less than ₹ 5 crores
A small scale unit is generally subjected to two types of registration. Initially, a provisional registration is granted for the proposed enterprise. It is termed provisional because the enterprise is yet to come into existence. It is granted for a specified period of time during which the unit is expected to be setup.
Once the unit has commenced commercial production, it is granted permanent registration. It is a life time registration given after physical inspection of the enterprise and scrutiny of certain documents.
- Ownership/tenancy rights of the premises where unit is located.
- Copy of partnership deed/Memorandum of articles of association in case of a private limited company
- Aadhaar of the person
- PAN of the firm/company
- Mobile number
- E-mail ID
- Bank statement/cancelled cheque
- Copy of licenses and bills of machinery purchased
- Sales bill and purchase bill
The registration certificate so issued by the concerned authority is seen as a proof of the unit being a small scale unit. It enables the unit to get several concessions like –
- Income tax exemption and Sales tax exemption as per the State Government policy.
- Incentives and concessions in power tariff, etc.
- Price and purchase preference for goods produced.
- Availability of raw material depending on existing policy.
Though, provisional registration is not compulsory for getting a permanent registration. But, a provisional certificate enables the unit to apply to the various departments and agencies for assistance in setting up of the enterprise.
Such a registration procedures is generally uniform across the States. However, there may be some modifications done by individual States. State and District level to promote SSIs. It gives recognition to the industrial unit and helps in generating a database for policy planning.
A small scale unit may also become liable for de-registration, if it crosses the investment limits; starts manufacturing any new item or items that require an industrial license or other kind of statutory license; or does not satisfy the condition of being owned, controlled or being a subsidiary of any other industrial undertaking.
RMC provides services in getting the Micro, Small and Medium Enterprises Registration to you and updating for any changes in the information.