Registration of Small Scale Industries(SSIs):
MSME Registration of an existing or proposed small scale enterprise is voluntary and not compulsory.
It has no statutory basis.
But, MSME 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:
The State Directorate or Commissioner of Industries or District Industries Centres (DIC’s) are the concerned authorities for registration of small scale units.
This registration is both location specific and product specific.
Like in certain State capitals and metropolitan cities, it is granted to only those units which are located in the designated industrial areas/estates.
A small scale unit is generally subjected to two types of registration.
[I]. Provisional Registration: Initially 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.
A ‘Provisional Registration Certificate (PRC)’ enables the unit to obtain :-
(i) Term loans and
(ii) Working capital from financial institutions,
(iii) Banks under priority sector lending;
(iv) Facilities for accommodation, land and other approvals;
(v) No objection certificates (NOCs) and clearances from regulatory bodies such as pollution control board, labour regulations, etc.
[II]. Permanent Registration:
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.
Some of the formalities required to be completed for seeking permanent registration are :-
Several Concessions:
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 :-
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.
For example, certain States may have a ‘SIDO registration scheme’ and a ‘State registration scheme’.
But, whatever be the registration scheme, the main purpose is to maintain statistics and a roll of such units for providing incentives as well as to create nodal centres at the Centre, State and District levels 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:
Hind Taxation & Associates charges only Rs 1000 for msme registration.