The PRC expires at the end of five years, at which point you may re-apply if the unit is not yet operational, or if the unit exceeds investment limits set by the MSMED Act. Once you commence operations, you can apply for the Permanent License.
For a registration, total plant and machinery cost should be up to Rs. 25 crore for manufacturing units and Rs. 10 crore for service units. While calculating this number, the value of land and building will not be counted toward the total investment. Also, the original cost of the equipment and plant and machinery is taken into account. Depreciation cannot be factored in.
All banks and other financial institutions recognise MSMEs and have created special schemes for them. This usually includes priority sector lending, which means that the likelihood of your business being sanctioned a loan is high. Bank loan interest rates will also be lower. There may also be preferential treatment in case of delay in repayment.
Most states offer those units registered under the MSMED Act a subsidy on power, taxes, and entry to state-run industrial estates. In particular, there is a sales tax exemption in most states and purchase preferences on goods produced. Depending on your business, you may also enjoy an excise exemption scheme and exemption from certain direct taxes in the initial years of your business.
Every nation’s economic hopes are pinned on its young, small businesses. The Indian government, with this in mind, offers numerous benefits to such organisations (cheaper credit, easy loan approval, tax exemptions, etc), so that they can achieve growth at a much faster pace and without enduring hardships. To avail of these benefits, the organisations that qualify must get an MSME or SSI Registration (regulated by the MSMED Act). This registration is among one of the easiest of government registrations to be granted.
The SSI Registration is only needed to avail of subsidies and benefits. It is absolutely voluntary. However, as it is a fairly easy registration to get quickly (provided you have a manufacturing plant or a commercial space where you render services), many business opt for it over other registrations.
This is because you can avail of a Provisional SSI Registration Certificate (PRC). The PRC will enable the unit to obtain term loans and working capital under priority sector lending and make it easier to procure various NOCs and clearances from regulatory bodies, such as Pollution Control Board.
You may apply for the PRC without an industrial license in case your unit is listed in Schedule-III of the Industrial Licensing Exemption Notification. Other units must first acquire an industrial license. The unit should also have obtained all other clearances, whether statutory or administrative. For example, a drug license under the drug control order or an NoC from Pollution Control Board, if required. The unit should not violate any locational restrictions in force. The unit should not be owned, controlled or subsidiary of any other industrial undertaking. The PRC is issued based on the application form. No field enquiry is made.
The benefits range from cheaper bank loans, easy access to credit, quicker approvals from state and central government bodies, tax rebates, cheaper infrastructure, including electricity and VAT exemptions.
Any entity with an SSI Registration that fails to follow any regulations laid by the government will be deregistered. Also, in case you exceed the investment limits, as noted below, your firm’s registration will be cancelled.
2 WORKING HOURS
You need to send in PAN cards, identity and address proofs of the proprietor/partners/directors. Private limited companies must also submit the Memorandum and Articles of Association, Form 32, Form 18 and Certificate of Incorporation, while Partnerships must submit the Partnership Agreement. Finally, the rental agreement for the office address, if it is rented, along