MSME Sector Playing a significant Role in Economic Dynamics of India
MSMEs have been accepted as the engine of economic growth for promoting equitable development worldwide. The development of a country depends on how far there is growth in the manufacturing and service sectors. In developing countries like India, such micro, small and medium enterprises plays a significant role in the emergence of economy. Such industries involve massive number of small scale industries therefore, they contribute to social and economic development of the country by generating more opportunities in the employment sector, manufacturing sector and service sectors also. The Micro, Small & Medium Enterprises (MSMEs) have been contributing significantly to the expansion of entrepreneurial endeavors through business innovations. The MSMEs are widening their domain across sectors of the economy, producing diverse range of products and services to meet demands of domestic as well as global markets.
The classifications of MSMEs are defined in following ways-
TYPE OF ENTERPRISE
INVESTMENT(not more than)
TURNOVER(not more than)
INR 1 CRORE
INR 5 CRORE
INR 10 CRORE
INR 50 CRORE
INR 50 CRORE
INR 250 CRORE
An analysis of Udayam Registration provides a break-up of Manufacturing and Services MSMEs. It may be noted that MSMEs in Service Sector comprise a larger proportion of Udayam Registration as compared to those MSMEs in Manufacturing Sector.
According to the MSME ministry data, there are about 6.3 crores MSMEs in India which contribute to 30% to the country’s GDP from their national and international trade.
The Small and Medium scale industries are so significant, the Government has number of benefits for them once they’re registered under the MSMED act. They are termed the MSME Registration Benefits. Some of the benefits are-
The MSMEs can avail subsidized and collateral free loan from banks at lower interest rate.
Protection against delayed payment by buyer of goods or services to a micro small enterprise.
50% subsidy in the payment of fees for trademark registration.
MSME registration also helps to acquire government tender easily.
Reimbursement of ISO certification.
REGISTRATION OF MSMEs-
Any enterprise that qualifies under the classification of MSME can obtain the registration online through UDYAM Portal. Following are the details required for registration-
Aadhar Card- In case of proprietorship firm, aadhar card of the proprietor
In case of partnership firm, aadhar card of partner
In case of HUF, aadhar card of Karta.
In case of body corporate, authorised signatory shall provide its GSTIN and PAN along with its Aadhaar number.
Registered address of the business
NIC digit code
v Investment and turnover details
v Registered mobile number for OTP
However, GSTIN is required only in case the enterprise is required to be registered as per GST Act.
Points to be noted while registration-
PAN & GST linked details on investment and turnover of enterprises will be taken automatically from Government data bases
Those who have EM-II or UAM registration or any other registration issued by any authority under the Ministry of MSME, will have to re-register themselves.
No enterprise shall file more than one Udyam Registration. However, any number of activities including manufacturing or service or both may be specified or added in one Registration.
INTRODUCTION OF MSME-1
The Ministry of Corporate Affairs vide notification dated 22.01.2019 introduced MSME-1 where specified companies having outstanding dues payable for more than 45 days to MSME ENTERPRISES have to file the particulars of outstanding dues in FORM MSME-1 to ROC.
“Specified Companies” means those companies
that has obtain goods or services from MSMEs.
whose payment to MSMEs exceed 45 days from the date of acceptance of goods or services.
Section 15 of MSMED ACT, 2006 states that where any supplier supplies any goods or render any services to any buyer, the buyer shall make the payment therefore on or before the date agreed upon between him and the supplier in writing or, where there is no agreement in this behalf, before the appointed day.
However the period agreed upon between the supplier and buyer in writing shall not exceed 45 days from the date of acceptance or deemed acceptance. Therefore, ROC introduced the concept of MSME return where the track can be kept of the companies that have outstanding dues to MSME enterprises.
MSME is a half yearly return to be filed after the completion of each half year.
30th April is the due date for the half year ended in March.
30st October is the due date for the half year ended in September.
CONSEQUENCES OF NON-FILING-
In case of non-filing of the form within the due date, the Company shall be punishable with a fine which may extend to twenty five thousand rupees and every officer of the company who is in default, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to three lakh rupees, or with both.
Since the due date of MSME return for the half year ended March 2022 is round the corner i.e 30.04.2022.