Registration of Micro, Small and Medium (MSME) Enterprises under MSMED Act is a very powerful medium to
enjoy the benefits available to such firms:
Micro and Small Enterprises:
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
1. Easy finance availability from Banks, without collateral requirement
2. Preference in procuring Government tenders
3. Reservation policies to manufacturing / production sector enterprises
4. Time-bound resolution of disputes with Buyers through conciliation and arbitration
Obligations for the buyers availing services or goods from MSM Enterprises
The Buyers have to ensure whether those suppliers of goods and services are under the purview of MSMED
Act i.e. the Buyers have to confirm the registration of the suppliers under the MSMED Act.
The Buyer should ensure the payment before the end of credit period decided else the interest would be
In case of disputes, application to Micro and Small Enterprises Facilitation Council (MSEFC) would
trigger the conciliation and arbitration process. Once the application is done under MSEFC, there is no
provision to withdraw the proceedings. Therefore, the Buyer should ensure the best ways to resolve the
disputes, if any, instead approaching to MSEFC in the initial stages of dispute.
The Buyers need to ensure that the Buyer does not owe any outstanding amount including interest due to
MSM Enterprises for more than 15 days. Otherwise, the Buyer needs to disclose this non-payment in the
Annual Financials of the Buyer.
Benefits/Safeguards to Micro and Small Enterprises in case of delayed payment by
Payment of interest
The Act provides for the payment of compound interest at 3 times the Bank Rate by the Buyer in case of
failure to make the payment with in maximum of 45 days from the date of receipt of goods or services.
Disclosure of delayed payment in audited accounts
Where any buyer is required to get his annual accounts audited under any law for the time being in
force, such buyer shall furnish the following additional information in his annual statement of
accounts, namely: -
The principal amount and the interest due thereon (to be shown separately) remaining unpaid to any
supplier (micro or small enterprise) as at the end of each accounting year;
The amount of interest paid by the buyer along with the amounts of the payment made to the supplier
beyond the appointed day during each accounting year;
The amount of interest due and payable for the period of delay in making payment (‘payment’ here means
the payment which have been made but beyond the appointed day during the year and without adding the
interest thereon specified under this Act for the period of delay);
Disallowance of interest under Income Tax Act, 1961
According to the Income Tax Act, 1961 the amount of interest payable or paid by any buyer, for delayed
payments to Micro and Small Enterprises shall not be allowed as deduction for the purpose of
computation income under the Income Tax Act, 1961.
Printing of MSMED Registration/EM Number on the letter heads, invoices etc.
The Micro and Small Enterprises should mention/get printed on their letter heads, supply order sheets,
invoices, bills and other relevant documents, the MSMED Registration/Entrepreneurs Memorandum (EM)
Number allotted by a competent authority, so that there remains an identification of being a MSE
GST is the biggest tax reform in India, tremendously improving ease of doing business and increasing the taxpayer base in India by bringing in millions of small businesses in India. By abolishing and subsuming multiple taxes into a single system, tax complexities would be reduced while tax base is increased substantially. Under the new GST regime, all entities involved in buying or selling goods or providing services or both are required to register for GST. Entities without GST registration would not be allowed to collect GST from a customer or claim input tax credit of GST paid or could be penalised. Further, registration under GST is mandatory once an entity crosses the minimum threshold turnover of starts a new business that is expected to cross the prescribed turnover.
As per the GST Council, entities in special category states with an annual turnover of Rs.10 lakhs and above would be required to register under GST. All other entities in rest of India would be required to register for GST if annual turnover exceeds Rs.20 lakhs. There are also various other criteria's, that could make an entity liable for obtaining GST registration - irrespective of annual sales turnover. Entities required to register for GST as per regulations must file for GST application within 30 days from the date on which the entity became liable for registration under GST.
Wings Finserv is the leading business services platform in India, offering a variety of services like income tax filing, GST return filing, private limited company registration, trademark filing and more. WINGS FINSERV can help you obtain GST registration in India and maintain GST compliance through a proprietary GST accounting software. The average time taken to obtain GST Certificate is about 5 - 10 working days, subject to government processing time and client document submission. Get a free consultation on GST and GST return filing by scheduling an appointment with an WINGS FINSERV Advisor.
A Digital Signature is the equivalent of a physical signature in electronic format, as it establishes the identity of the sender of an electronic document in the Internet. Digital Signatures are used in India for online transactions such as Income Tax E-Filing, Company or LLP Incorporation, Filing Annual Return, E-Tenders, etc., There are three types of Digital Signatures, Class I, Class II and Class III Digital Signature. Class I type of Digital Signatures are only used for securing email communication. Class II type of Digital Signatures are used for Company or LLP Incorporation, IT Return E-Filing, Obtaining DIN or DPIN, and filing other forms with the Ministry of Corporate Affairs and Income Tax Department. Class III type Digital Signatures are used mainly for E-Tendering and for participating in E-Auctions. Digital Signatures come in the form of a USB E-Token, wherein the Digital Signature Certificate is stored in a USB Drive and can be accessed through a computer to sign documents electronically.
With E-Return filing becoming mandatory for Income Tax Assesses with an income of over Rs.5 lakhs per annum, the requirement and prevalence of Digital Signatures has increased manifold. WINGS FINSERV can help you obtain your Digital Signature hassle-free online. WINGS FINSERV is a Registered Partner of MSME and E-Mudhra
An WINGS FINSERV Tax Expert will prepare your TAN Application and obtain your signature in the format along with the necessary supporting documents.
Once the application is prepared, WINGS FINSERV will submit the TAN Application to the Tax Department. WINGS FINSERV is a TAN Facilitiation Center.
Once the application and the attached supporting documents are verified, the Tax Department will allot a TAN Number for your business.
Employees Provident Fund (EPF) is a scheme controlled by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. It is regulated under the umbrella of Employees’ Provident Fund Organisation (EPFO). PF registration is applicable for all establishment which employs 20 or more persons. PF registration can also be obtained voluntarily by establishments having less than 20 employee.
The PF contribution paid by the employer is 6% of (basic salary + dearness allowance + retaining allowance). An equal contribution is payable by the employee. In case of establishments which engage less than 20 employees or meet certain other conditions, as per the EPFO rules, the contribution rate for both employee and the employer is restricted to 10%. For most employees working in the private sector, it’s the basic salary on which the contribution is calculated.
It is obligatory that employees’ drawing less than Rs 15,000 per month, to become members of the EPF. As per the guidelines in EPF, employee, whose ‘basic pay’ is more than Rs. 15,000 per month, at the time of joining, is not required to make PF contributions. Nevertheless, an employee who is drawing a pay of more than Rs 15,000 can still become a member and make PF contributions, with the consent of the Employer.
Provident fund return must be filed by all entities having PF registration every month. PF return is due on the 25th of each month. Further, a final PF return is due on the 25th of April for the year ended on 31st March.
Provident Fund (PF) payments are due on the 15th of each month. The employer must deposit a total of 12% or 10% of the employee wages towards PF on or before this date every month. For most entities, the PF rate of 12% would be applicable.
The Employee Provident Fund has launched the Unified Portal to streamline and simplify all aspects of provident fund for both employers and employees. Employees who have the newly allotted UAN can use the Unified Portal for various services.
To improve ease of doing business, all services relating to provident fund like PF registration, PF return filing and payment of PF contribution has been made available online through the Unified Portal.
Employees who have contributed to PF can withdraw money in their PF account for various reasons by applying on the Unified Portal. PF can be withdrawn for house purchase, medical reasons
Employee's State Insurance(ESI) is a self-financing social security and health insurance scheme for Indian workers. For all employees earning INR 21000 or less per month as wages, the employer contributes 4.75 percentage and employee contributes 1.75 percentage, total share 6.5 percentage. This fund is managed by the ESI Corporation (ESI) according to rules and regulations stipulated therein the ESI Act 1948, which oversees the provision of medical and cash benefits to the employees and their family through its large network of branch offices, dispensaries and hospitals throughout India. ESI is an autonomous corporation under Ministry of Labour and Employment, Government of India. But most of the dispensaries and hospitals are run by concerned state governments.
Employees registered under the ESI enjoy a range of benefits under the scheme. Employee enjoy medical attendance and treatment for the person insured and their families including full range of medical, surgical and obstetric treatment, supply of all drugs, ambulance services, super-specialty consultation, etc., In addition, to the medical care, insured persons also enjoy sick pay benefits. Registration with ESI provides the employee with tremendous benefits and improves worker morale and retention. WINGS FINSERV can help your Company obtain and manage ESI Registration.
The Food Safety & Standards Act, 2006 introduced to improve the hygiene and quality of food has brought about tremendous changes in the food industry. As per the Act, no person shall commence or carry on any food business except under a FSSAI license or FSSAI registration. Therefore, any food manufacturing or processing or packaging or distributing entity is now required to obtain a FSSAI License or Registration.
FSSAI License is issued by the Food Safety and Standards Authority of India (FSSAI), Ministry of Family Health & Welfare, Government of India. Application to commence a food business must be made to the FSSAI in the prescribed format. Based on the application and supporting documents, FSSAI will accord approval. WINGS FINSERVcan help your business obtain FSSAI Registration or License quickly and hassle-fee. Talk to our Business Advisors and we will help you get the necessary FSSAI approvals and registrations.