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Author: Associate Debasmita Patra

Small Scale Industry (SSIs) or Micro, Small and Medium Enterprises (MSMEs) are those types of industries wherein the manufacturing or production of goods and services are performed on a small or micro scale. A one-time investment is made in machinery, equipment, plants, and other assets, either on ownership or hires purchase basis. The mechanism involved in SSIs is relatively smaller with a few workers or employees.

 There are three slabs invested* in P and M prescribed under MSME Act-

 · Micro-investment up to 25lakhs

·Small- investment up to 75 crores.

· Medium- investment up to 10 crores

SSIs, if dealing with the manufacturing of goods, the investment in plant and machinery does not exceed Rs. Five crores, while in case of service providers the investment is lowered to a maximum bracket of Rs. 2 crores.

India as a developing economy hails to consolidate its economic position in the global sphere with the help of SSIs. These labor-intensive industries boost the employment ratio while escalating the per capita income as well.

The registration of the SSI process is granted by the state Directorate of Industries abiding by the guidelines of the Development Commissioner (SSI), Ministry of Industry, Department of SSI and Agro & Rural Industries. The Industrial Act 1951 governs the classification of investments in fixed assets in chinile nebi.

Provided SSIs be them dealing with as manufacturing units or service rendering platforms, cater to the required investment bracket that has different groups set to be adjudged as Micro, Small or Medium enterprises, they can obtain registration.

Important documents required for providing SSI registration include-

1. Copy of the MOA and AOA in case of Private Limited Company along with its certificate of incorporation.

2. Copy of the partnership deed in case of a partnership firm, though registration under the Partnership Act is not mandatory.

3. Legal possession certificates of proof like rent agreement receipts and NOC from landlord etc.

4. Prior approval from Delhi Pollution Control Committee (if the unit is in Delhi).

5. Passport size photographs of the proprietor or partners or director, whatever the case may be.

It is not mandatory for an existing or proposed SSI to register itself. The registration is voluntarily initiated to avail unique benefits given by the Central or State Govt. for the development and promotion of SSIs. The registration process is both product and location specific. In some capital metropolitan cities, SSI registration is granted to those units that are favorably located in designated industrial areas. The whole process of registration involves two types of certificates:

•  The first step is to apply for Provisional SSI Registration Certificate (PRC). The term “Provisional” is used as the unit is yet to come into existence. This certificate is given when the SSI unit being talked about is in a pre-operative period. The PRC certificate, when obtained, can aid units to obtain working capital and term loan from banks or other financial institutions under priority sector lending. Other requirements, like those of accommodation and land and many other approvals, are also easily met with the help of the aforesaid certificate. 

•  The second step is to commence the business with the Provisional SSI Registration Certificate and start the manufacturing or production processes

•  The SSI unit, once successfully commenced, is granted a permanent Registration certificate. After proper and due scrutinization of the enterprise and inspection of the involved documents, the SSI unit can apply and obtain permanent registration which stands valid for lifetime.

Formalities like approvals and clearances or NOC from the municipal corporation, state, and central pollution control boards, electricity boards, MOA and AOA (in case of Private Limited company), sales and purchase bills, etc. are required to be completed by an SSI enterprise to obtain permanent registration.

The permanent certificate also obtained enables the unit to avail specific concession in the form of Income Tax and Sales exemption among others.

Benefits of SSI registration include-

1. A bank loan with a lower interest rate than a typical business loan.

2. Loans without collateral thereby giving access to easy credits as done under the Mudhra Loan scheme formed by PM Modi.

3. Multiple tax subsidiaries and tax rebates.

4. Lower cost of infrastructures by way of electricity and VAT exemption.

5. Easy access to govt. Tenders to promote MSME participation in the industry.

Online SSI registration can also be obtained through various portals throughout the nation in a mere few days, subject to the processing time of respective State Government. SSI registration now has been rebranded as Udyog Aadhar registration (UAM), thereby linking the registration process to Aadhar number. The registration done in this way online is free of cost and is accessed easily. In the case of Private Limited companies and partnership firms, the Aadhar identity of any of the members can be used. PAN card of the authorized person is also required to enable registration for SSI.

Registered SSIs can be subject to de-registration if:

•  Specified investment limits are exceeded in case of P&M.

•  Production of items not listed is initiated.

•  Owned or controlled or is a subsidiary of any other undertaking

•  The unit fails to comply with any of the required regulations.