CS Binit Thakur
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An overview on what are Micro, Small and Medium Enterprise and its structure on and after FM announcement made on 13.05.2020. The Union Finance Minister Nirmala Sitharaman has announced measures to help businesses, including micro, small and medium enterprises (MSMEs), recover from the economic i
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FAQ :
MSMEs are classified into two categories: Manufacturing enterprises, engaged in the production of goods, and Service enterprises, engaged in providing services.
Since 14.05.2020, MSMEs are defined by both investment in plant and machinery/equipment AND turnover, whereas previously they were defined solely by investment.
For Micro enterprises, investment is up to Rs 1 Cr and turnover up to Rs 5 Cr. For Small enterprises, investment is more than Rs 1 Cr and less than Rs 10 Cr, with turnover up to Rs 50 Cr. For Medium enterprises, investment is more than Rs 10 Cr and less than Rs 20 Cr, with turnover up to Rs 100 Cr.
Key benefits include easier finance availability without collateral, protection against delayed payments, preference in government tenders, stamp duty and octroi benefits, and concessions in electricity bills.
Yes, MSME registration provides protection against delayed payments from buyers and grants the right to charge interest on delayed payments.
Yes, registered MSMEs can benefit from credit prescription (priority sector lending), differential rates of interest, excise duty exemptions, and exemptions under Direct Tax Laws.
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