Small and medium enterprises are able to register themselves as MSME entities by using the Udyog Aadhaar (also known as Aadhaar for Business). It is a 12-digit government identification number.
The proprietor of a sole proprietorship does not receive official recognition for his business as opposed to other business entities. Sole proprietors who do not have an official government recognition should strongly consider obtaining a Udyog Aadhaar, which gives a sole proprietor a unique identity and enables him to register the business with the Indian government and validate its existence.
Most business entities have official recognition and can obtain Udyog Aadhaar and other MSME benefits as outlined below.
Benefits of Udyog Aadhaar
Your business can benefit greatly by registering and receiving a Udyog Aadhaar.
This is a list of the benefits derived from various schemes offered by the Ministry of MSME with regard to protecting, growing, and developing small enterprises. These benefits can also be obtained by the holders of Udyog Aadhaar.
The benefits are as follows:-
- Protection against delay in payment.
- Fast resolution of disputes
- Collateral Free loans from bank
- Exclusive consideration for participating in international trade fair
- Octroi benefits
- Waiver of Stamp duty and Registration fees
- Several Exemption under Direct Tax Laws
- Barcode registration subsidy
- Subsidy on NSIC Performance and Credit ratings
- Counter Guarantee from GoI through CGSTI
- Reduced rate of interest from banks
- 15% subsidy under CLCSS scheme for technology upgradation
- Exemptions while applying for Government tenders
- Concession in Electricity Bills
- Reimbursement of payment made for obtaining ISO certification
- 1% exemption in interest on OD
- Increasing eligible loan limit for optimal reasons, from the amount of Rs. 25 lakh to Rs. 50 lakh
- Raising the extent of guarantee cover from 75 % to 80 %
- Reservation of products for exclusive manufacturing by MSME/SSI
- Easier registration and approvals to obtain Licenses
- Eligible for IPS subsidy
- Preference in allocation of Government tenders
- Excise Exemption Scheme
- Reduced rate of interest from banks
- 50% subsidy for patent registration
The above are a few of the benefits that an Udyog Aadhaar holder can enjoy. Additional benefits can also be enjoyed by those who hold an Udyog Aadhaar as new schemes are introduced.