MSME-registered businesses are eligible for Direct Tax Exemption in the first year of operation, as specified in the government's policy and depending on the kind of firm.

When applying for government tenders, businesses with MSME registration receive the following incentives from the Ministry of Micro, Small and Medium Enterprises:

• Free distribution of tender sets
• Earnest Money is not required to be paid
• Waiver of Security Deposit up to the Monetary Limit of the unit

One of the main policy steps for fostering this text-centred industry has been the statutory reservation of products for exclusive manufacturing in the SSI sector, as provided in the Industries (Development and Regulation) Act, 1951.

According to the plan, MSME-registered businesses are eligible for the Industrial Promotion Subsidy (IPS).

MSME-registered businesses can benefit from excise exemption in their first year of operation, as stated in the government's excise exemption programme, and based on their business activity.

Ensure enhanced consumer product production in the small-scale sector. Increase job prospects by establishing small-scale enterprises.

Compared to other businesses, the Rate of interest for MSME registered companies is lower. Bank financing to Micro and Small Businesses must meet specific criteria. Banks must target a 20% increase in credit to micro and small businesses, a 10% yearly increase in micro-business accounts, and 60% of overall lending to the micro and small business sector. Banks must follow the following rules:

• Micro and small businesses engaged in manufacturing with an investment of up to Rs.10 lakh in plant and machinery, and service businesses with an investment of up to Rs.4 lakh in equipment, must get 40% of total advances.
• Manufacturing firms with investments in plant and machinery between Rs.10 lakh and Rs.25 lakh, and service enterprises with investments in equipment above Rs.4 lakh, should get 20% of the total advance to micro and small enterprises.
• Put another way, and tiny businesses must receive 60% of the advances.

As specified in the plan, MSME-registered businesses are eligible for a 1% interest rate reduction on overdrafts.

MSME-registered businesses can take advantage of the scheme's Bar Code Registration discount.

MSME Registration Certificate holders can discount their power bill by applying to the electrical department together with their MSME Registration Certificate.

MSME-registered businesses are eligible for a Counter Guarantee from the Government of India through the CGSTI.

MSME-registered businesses have been given priority when it comes to government bids. When applying for government bids, MSME Registered organisations are given special consideration.

IT units in public IT parks are now free from stamp duty and registration costs until March 31, 2006. All new industrial units and expansions with MSME Registration are now free from paying Stamp Duty and Registration costs.

The Ministry of Micro, Small and Medium Enterprises runs a "Credit Linked CGSTI Subsidy Scheme (CLCSS)" programme to help small businesses upgrade their technology. The programme began in October 2000 and was updated on September 29, 2005. The revamped plan intends to help Micro and Small Enterprises (MSEs) upgrade their technology by offering a 15? Capital subsidy (capped at Rs.15 lakhs) for the acquisition of Plant and Machinery. The maximum loan amount you may use to calculate the contribution under the plan is Rs.100 lakhs. The scheme has authorized over 1500 well-established/improved innovations across 51 sub-sectors.

Businesses with an MSME Registration Certificate can get a 50% discount for patent registration by applying to the appropriate government.

The system of octroi reimbursement granted under the 1993 Package Scheme of Incentives will be included in the new Scheme on the same pattern till 31-3-2006. When an account-based cess or other levy is imposed instead of or in place of octroi, the change is also eligible for a refund, just like octroi.

MSME Registration Certificate holders can claim reimbursement for ISO Certificate Expenses by applying to the appropriate authorities together with their MSME Registration Certificate.

It has made it much easier for businesses with an MSME Certificate to get licences, permits, and registrations from the appropriate authorities. They can now present their MSME Registration Certificate when applying.

The Ministry of Micro, Small and Medium Enterprises protects MSME Registered Businesses against late payments from buyers and rights to interest on late payments through mediation and arbitration, with dispute resolution taking place in the shortest period possible. Suppose a buyer purchases products or services from a micro or small business with MSME registration. The buyer must pay on or before the date agreed upon between the buyer and the micro or small business. If the agreement does not include a payment deadline, the buyer must pay within fifteen days of receiving the goods or services. In any instance, a payment payable to a micro or small business cannot be delayed for more than 45 days from the date of acceptance or assumed acceptance. Suppose the customer fails to pay on time. In that case, the provider is entitled to compound interest with monthly interest rates on that amount from the stipulated date of payment or fifteen days after receipt of goods or services. The penalty interest payable to an MSME for late payment is three times the bank rate announced by the Reserve Bank of India.