The Government of India announced Udyam Registration on July 1, 2020, however it has always existed under a different name. Udyog Aadhaar, formerly known as Udyam Registration, supports businesses in acquiring MSME (micro, small, or medium enterprise) accreditation. This is the most major advantage of the Udyam Registration, aside from a variety of additional advantages for enterprises. But first, let us define Udyam and then learn about its various advantages.
Udyam Registration is an identification number and certificate given to businesses who want to register as a “Micro, Small, and Medium” (MSME). This certificate serves as a form of recognition for MSMEs. Furthermore, firms are placed into the appropriate category, such as Micro, Small, or Medium, based on their investment and turnover. The Udyam Registration incentives given to MSMEs are only available if the business registers via the Udyam system. If you have all of the necessary documentation, the Udyam Registration Process is simple and online.
Firms that apply for Udyam Registration must be existing businesses in the manufacturing or service sectors. Microbusinesses have an investment of less than Rs 1 crore and sales of less than Rs 5 crore. A small enterprise is defined as one with a capital investment of less than Rs 10 crore and annual revenue of up to Rs 50 crore. A Medium enterprise is one that has an investment of less than Rs 50 crore and a turnover of up to Rs 250 crore.
After completing the Udyam Registration process, firms can gain access to a number of benefits. MSMEs profit from the Udyam Registration by receiving collateral-free loans, lower loan interest rates, reductions and exemptions on a variety of programs, and a variety of other perks, all of which encourage enterprises to expand and thrive. Some of the advantages of Udyam Registration are discussed below..
Loans with No Collateral
One of the most advantageous features of Udyam Registration for MSMEs is that it allows small businesses to apply for collateral-free loans that are accepted by the Government of India, The Credit Guarantee Trust Fund Scheme was established by the Small Industries Development Bank of India and the Ministry of Micro, Small, and Medium Enterprise.
Subsidy on Bank Loan Interest Rates
Along with securing collateral-free bank loans, one of the Udyam Registration benefits is that it assists small businesses in obtaining interest rate subsidies when applying for bank loans.
Exemption from Direct Tax Legislation
Small enterprises registered under Udyam are aided by the government in the form of exemption from Direct Tax rules, such as tax relief, reduced tax rates, or tax collected on only a fraction of the commodities. Overdraft Facility With Exemption From Interest Rates
Small firms and enterprises that are registered under the Ministry of MSME's Udyam Registration are also eligible for overdraft and interest rate exemption under the Credit Guarantee Trust Fund Scheme. This may differ from one bank to the next.
Easier Approval Of Licences
Businesses who have registered for Udyam Registration find it easier to apply for and gain approval for numerous licenses, registrations, and other certificates. Because of Udyam Registration, businesses can now apply for official approvals, certifications, and registrations.
Trademark and Patent Registration Subsidy
Another benefit of Udyam Registration is that small firms registered under Udyam's Ministry of Micro, Small, and Medium Enterprises Development Act, 2006, receive a significant subsidy for industrial promotion as well as trademark and patent registration.
Reimbursement of ISO Certification Fees
Businesses that have registered through the Udyam Registration for MSMEs can seek reimbursement for fees incurred while obtaining ISO certification.
Electricity Bill Reduction
Another advantage of Udyam Registration is that small businesses who register via the platform may be eligible for electricity bill savings. This, in turn, helps businesses conserve resources.
Applying for Government Tenders Is Simple
Small, micro, and medium-sized enterprises who have obtained Udyam Registration profit from it by being able to participate in Government tender auctions and simply obtaining exemption when applying for these tenders. Furthermore, the registration includes a Government security deposit waiver (EMD) while participating in and applying for tenders.
The Benefits of Reservation
The Udyam Registration gives small enterprises the advantage of reserving specific items that can only be created by the MSME.
Participation In International Fairs
Small businesses and start-ups with Udyam Registration can showcase their products and services at international fairs and trade events. The government has approved and encouraged this participation, notably among Udyam-registered businesses..
Apart from these, the other benefits include-
CLCSS, or credit-linked capital subsidy scheme, is only available to Udyam registered enterprises.
Under Udyam Registration, businesses are protected against late payments or materials or services supplied.
Waivers of stamp duty and registration fees are included among the Udyam Registration perks for businesses.
Along with NSIC performance, the registration includes a credit rating fee subsidy.
Subsidies for barcode registration are also available to businesses that fall under Udyam Registration for MSMEs.
Another advantage of the Udyam Regulation for small firms is the availability and eligibility for the excise exemption scheme.
Also read-Udyam registration certificate
Thus, industrial and service sector enterprises who register for Udyam Registration receive access to a variety of subsidies, as well as eligibility for a variety of Government programs and incentives, which aid in the development and success of their businesses. However, in order to receive print udyam registration, enterprises must first obtain Udyam Registration. Small firms that are registered as MSME can take advantage of the numerous benefits that Udyam Registration has to offer.