Udyam (earlier known as Udyog Adhaar) is a registration certificate for the MSMEs, that can be obtained from the Udyam registration portal by self-declaring all the necessary information.
As per the Government’s notification, Udyam registration will be mandatory for all those who are willing to establish their Micro, Small or Medium enterprise. Upon Registration, these MSMEs will be provided with an e-certificate known as “Udyam Registration Certificate”.
For the existing companies, Registration on the portal before 31st March 2021 will be mandatory. The purpose of Udyam registration is to validate the existence of any business in the system.
For business owners and entrepreneurs, registering themselves at the Udyam portal can be beneficial in multiple ways. They can avail of various schemes and benefits that are offered by the Government to MSMEs.
If you too are a business owner who hasn’t registered yourself at the Udyam portal, keep reading.
I will be explaining the top 10 benefits of Udyam registration in this blog.
Benefits of Udyam registration
The sole purpose of the Udyam Registration is to provide a thriving business environment to the budding and aspiring businesses throughout the nation. Through this Registration, the Government of India intends to offer multiple excellent opportunities to empower India’s Rural & Semi-Urban areas and realize the dream of “Make in India” and “Made in India”!
Here are the benefits of Udyam registration
- Collateral Free Loans
Every Micro, small or medium business owner can’t invest a large amount in their business. Collateral-free loans can be beneficial in such cases.
Udyam registered businesses are entitled to Collateral-free loans for satisfying their financial need. This benefit is provided to help MSMEs grow and make them self-reliable.
- Protection against delayed payment
Under the MSME Development Act 2006, there is a provision to handle the delayed payment issue. Under this act, the buyer is liable to pay interest to the MSME supplier if it fails to clear the payment within 45 days of the supply.
The government has also launched the SAMAADHAAN portal to address the grievances of MSME directly and more quickly.
- Subsidized Interest rates on bank loans
All the businesses registered under MSME are eligible for the subsidies on the interest rate on the bank loans. The subsidy might vary from bank to bank, but ultimately MSMEs will have to pay less interest on the loans.
- Subsidy on patent registration
If you are planning to take patent of some product or service, MSME registration can help you avail of a whopping 50% subsidy on the registration process. All you have to do is send the application for the subsidy to the respective department while filing your application for the patent.
- EMD waiver for Government’s tender
Businesses registered under MSME don’t have to pay the security deposit, or earnest money while applying for any Government tender. This can be very helpful to those MSMEs that can fulfill the tender but can’t do so due to a lack of finance necessary for the security deposit.
- Eligibility for CLCSS
The Government introduced the scheme of CLCSS (Credit Linked Capital Subsidy Scheme), so the businesses can have easy access to the capital.
All the businesses registered under MSME are eligible for this scheme. Under this scheme, MSME can get 15% subsidy upfront on the institutional credit of up to 1 crore.
- Exception from excise duty
MSME with the annual turnover up to 1 crore is fully exempted from paying excise duty. For the MSMEs having annual turnover up to 3 crores, concessional excise duty is applicable. Moreover, the MSME units manufacturing branded goods in rural areas are exempted from excise duty
- Exemption of 1% interest on ODs
Under the Credit Guarantee Trust Fund Scheme, all businesses registered under as MSME are entitled to avail the benefit of 1% on the overdraft. Such a low interest in ODs can be beneficial for any cash-strapped MSME.
- Priority in availing credit
SIDBI(Small industries development bank) has been established in India for financing MSMEs. All the registered MSMEs are covered under the priority sector while disbursing credits. So it is easy for registered MSMEs to obtain credit as compared to others.
- Fee waiver on Stamp duty and Registration
To boost the MSMEs, stamp duty and registration fees for MSMEs us being waived off by the Government.
Apart from these primary benefits, there are lots of other benefits of MSME or Udyam Registration like
- Preference in international trades fairs
- Barcode registration subsidy
- Industrial promotion subsidy
- Ease of obtaining Registration
- Bar-code registration subsidy
MSMEs’ contribution is around 30% of the total national GDP, and the Government intends to push it to 50% as they can help generate massive employment in rural and semi-urban areas. Due to multiple measures taken by the Government, MSMEs are growing at a rapid pace.
Udyam registration is one such step that can significantly boost your business. So we highly recommend that you get your business registered under the Udyam portal.
Are you still confused about Udyam registration or need more information?
Talk to our MSME experts for more details! They will be more than happy to help!