Udyam registration or MSME Registration is open for traders. As per the government, anybody engaged in trading whether wholesale or retail can register and enjoy the benefits as various other registered entities under MSME registration. In this blog, we will explain traders about MSME registration.
MSME Registration for Traders: Official Impact and Announcement
The question arises – is MSME Act applicable for traders? As of 2022, the Government of India extended Micro, Small, and Medium Enterprises classification to include wholesale and retail sellers. So, these traders today have access to priority sector lending by banks along with other financial institutions according to the Reserve Bank of India guidelines.
This development benefits participants in retail and wholesale trade such as four-wheeler repair and motorcycle maintenance.
Influence upon Smaller Wholesalers and Retailers
The decision to extend MSME registration for traders helps smaller retailers and wholesalers with turnovers as high as Rs 250 crore get quick credit through various schemes introduced under Atmanirbhar Bharat.
In line with RBI circular of July, enterprises with Udyog Aadhaar Memorandum under the said three NIC codes are authorised to migrate to Udyam Registration Portal. UAM is a single page self-declaration application form for registration. In this format MSMEs can state their existence and furnish their account information, Aadhaar info of promoter along with other details.
MSME Benefits for Traders
As MSME for traders or Udyam Registration (formerly MSME Registration) for traders offers advantages to registered businesses and traders which could help them boost their growth and operation. Benefits for traders of MSME registration consist of :
1. Collateral Free Bank Loans Available
The Government of India has taken extensive measures to offer collateral-free loans to small and micro enterprises. This effort aims to ease the loan procurement procedure for small businesses and steer clear of the issues of standard institutions that are known to impose strict loan disbursement policies. The Credit Guarantee Trust Fund scheme of GOI, Small Industries Development Bank of India and Ministry of MSME helps in implementing this Scheme and helps financially aggrieved enterprises.
2. Cost Relaxation in Patent Registration
Under the laws applicable to entities registered under MSMEs, the 50% subsidy on patent registration fees is applicable. This particular subsidy is a main encouragement to innovation in small businesses to create new technologies and projects. The entity should apply for this particular subsidy through the relevant ministries through a prescribed application.
3. Overdraft Interest Rate Exemption
With MSME registration, traders get 1% discount on Overdraft Interest Rate under a bank – specific scheme. This financial advantage enables small entities to face unexpected financial crises.
4. Eligibility to Industrial Promotion Subsidy
MSME registration for traders provides entitlement to Government of India subsidy for Industrial Promotion.
5. Coverage Against Deferred Payment
MSME sector frequently experiences delayed payments which usually disrupt supply chains and economic difficulties. Still, MSME registration affords such registered entities protection and they can address this issue. The government penalises defaulters for not paying in fifteen days or the agreed day from the business transaction, as required by a Supreme Court judgement. Interest on delayed payments is charged as per RBI norms.
6. Electricity Bill concessions
All MSME-registered companies can avail electricity bill concessions. This concession helps businesses to boost production rates and get more orders from clients without incurring capital expenditure on electricity and maintenance. The concerned MSME has to apply for this particular benefit through the state electricity department with registration certificate.
7. ISO Certification Charges Reimbursements
Any MSME registered entity is entitled to claim reimbursement of costs incurred for acquiring the ISO certification thereby promoting quality standards and compliance in the sector.
Final Thoughts
To answer the question – is MSME applicable for traders, the answer is yes. MSME registration for traders is a tool with the possibility of formal recognition and many provisions. Through registration, traders obtain collateral-free loans and lower overdraft interest rates.
The registration also offers cost savings through subsidies on patent registration costs and reimbursement of ISO certification charges to promote innovation and quality standards. Protective cover against delayed payments contributes to a more secure and stable business environment – a common issue in trading. Generally, MSME registration helps traders increase their creation, growth, and credibility in an environment which allows long-term success.
FAQs
1. What is MSME Registration for Traders?
MSME Registration or Udyam Registration currently includes traders who can register their wholesale or retail trade company as Micro, Small and Medium Enterprises. This allows them to avail government benefits and support schemes.
2. What are the MSME benefits for traders?
The MSME benefits for traders consist of collateral-free bank loans, subsidy on patent registration fees, exemption on overdraft interest rates, industrial promotion subsidies, protection against deferred payments, concessions on electricity bills and reimbursement of ISO certification charges.
3. How MSME Registration helps with delayed payments?
A Supreme Court judgement states the central government penalises defaulters for not paying the registered MSMEs within fifteen days or the agreed day from the business transaction. Interest on delayed payments is charged as per RBI norms to safeguard registered traders.
4. Could smaller retailers and wholesalers with turnover under Rs 250 crore benefit from MSME Registration?
Yes, the move to enable MSME Registration to traders has helped smaller retailers and wholesalers with turnovers as much as Rs 250 crore get credit under various schemes introduced under Atmanirbhar Bharat.
5. How do traders apply for MSME Registration?
Traders may apply MSME Registration via Udyam Registration Portal. They must fill in the Udyog Aadhaar Memorandum, a one-page self-declaration form with information about their company, bank account, Aadhaar info of the promoter along with some other information.
