by CA Parameswaran S
I see plenty of channel partner organizations not knowing the implication of exceeding the limits prescribed for classification as a micro, small or medium enterprise. If a Micro or a small enterprise crosses the permissible investment limits, they would have to re-file part II of the Entrepreneurs™Memorandum. However, I found many channel partners register their organization under small and medium enterprises.
If the investment limit in a Medium enterprise exceeds the permissible limit, it will become liable for de-registration and would not be eligible for preferred treatment reserved for the MSMEs.
Here are the 20 reasons if your organization has MSME status:
1. Easy finance availability from Banks, without collateral requirement
2. Protection against delay in payment from Buyers and right of interest on delayed payment
3. Preference in procuring Government tenders,
4. Stamp duty and Octroi benefits,
5. Concession in electricity bills
6. Reservation policies to manufacturing / production sector enterprises
7. Time-bound resolution of disputes with Buyers through conciliation and arbitration
8. Reimbursement of ISO Certification Expenses
9. Credit prescription (Priority sector lending), differential rates of interest etc.
10. Excise Exemption Scheme
11. Stamp duty and Octroi benefits,
12. Statutory support such as reservation and the Interest on Delayed Payments Act.
13. Subsidy on ISO Certifications
14. Subsidy on NSIC Performance and Credit ratings
15. Participation in Govt Purchase registrations
16. Counter Guarantee from Govt of India through CGSTI (Credit Guarantee Fund Trust)
17. Waiver in Earnest Money (Security Deposit ) in Govt tenders
18. Stamp duty and Octroi benefits,
19. 15% weight in price Preference.
20. Reduction in rate of Interest from banks (Subject to ratings)
(The author is a Chennai-based charted accountant based. Views expressed are personal)