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Getting an MSME registration certificate is a necessity for micro, small, and medium Enterprises in India. It offers various incentives and privileges that play a pivotal role in fostering business growth.
MSMEs, or micro, small and medium-size businesses, drive a country's economy. These sectors have a lot of potential, and that is why the Government of India is offering a lot of relief through various programs to the MSME sector.
The aim is to boost these sector's growth by offering lower interest rates, availability of loans, etc. However, to avail of all these benefits offered by the Government, MSME or Udyam Registration is necessary.
One question that often strikes is do MSMEs need a GST@ number for a Udyam certificate. In this blog, we will understand what MSME is and if a GST number is necessary for MSME Udyam registration.
What is MSME?
Micro, Small, and Medium Enterprises, commonly known as MSMEs, are businesses of different sizes in India. To help categorize them, the government has set up a registration process. A business is classified as MSME based on the provisions of the MSME Act of 2006. MSME registration is essential for businesses that fall in this classification to begin business operations.
Is the GST Number Mandatory for MSME Udyam Registration?
The GST number is not mandatory for the MSME registration process for businesses or entities that do not require GST registration. However, enterprises or businesses whose annual turnover is above ₹40 lakhs are taxable entities. So, they need to have a GST registration number.
Further, the Udyam Online Registration Portal, linked with the Income Tax* and GSTIN systems, would automatically pull PAN and GST-related information such as investment, revenue, etc of business that has annual turnover over ₹40 lakh from the Government records.
Required MSME Registration Documents
To obtain the MSME registration certificate, the following documents are required:
- Valid Aadhaar number
- Mobile number that is linked to the Aadhar card.
- PAN Card number
- Valid GSTIN or GST Registration of firms.
Steps to Apply For MSME Udyam Registration
To get the MSME Udyam registration certificate, entities need to carry out a simple process that can be done online. There are no fees for MSME Udyam Registration. Below are the following steps that need to be followed.
- Step 1: Visit the official website of Udyam Registration.
- Step 2: Click on the registration option "for new entrepreneurs" on the page.
- Step 3: Then, on the next page, you have to enter the "Aadhar number" and "Name" and then double click on "Validate and Generate OTP."
- Step 4: Once the validation is done, the user needs to enter "Type of Organisation" and "PAN number" and click on the option "Validate PAN."
- Step 5: Further, the portal will fetch all the details of the PAN from the Government's database and then validate the PAN number.
- Step 6: After that, a Udyam Registration form will open, and you need to fill out all the asked details.
- Step 7: Enter the turnover and investment details and then check the declaration box.
- Step 9: Click the "Submit and get Final OTP" button. After entering the OTP, which is sent to your registered number or email, the process will be completed. The Udyam Registration Certificate will be emailed to you.
How Can MSMEs Get a GST Certificate?
Businesses or entities need GST certification as it is needed in business transactions, mentioning the flow of goods and services. Here is how an MSME can get a GST certificate:
Documents Needed for MSME to Register Under GST
- MSME Registration Certificate
- Existing Service Tax Details
- PAN Details
- Aadhar Details
- Bank Account Details
- Address Proof
- Other Needed Documents
Steps for MSME GST registration
- Step 1: Browse to the website of Goods and Services Tax of India.
- Step 2: Select "New Registration" and fill out all the details such as name, address, PAN, state, email address, mobile number, etc., and then click on "Proceed."
- Step 3: An OTP will be sent to your email address and mobile number. Submit the OTP and verify both. Then, a TRN (temporary reference number) is provided to you.
- Step 4: Next, log in using your TRN number to fill out part B of the GST registration application, which contains details about your place of business, bank account and more. Submit all the required documents, such as bank details copy, address proof copy, etc., to finish this process.
- Step 5: After providing all the information, you must cross-check the details on the verification page.
- Step 6: Further, you need to sign the application as suggested by the portal digitally. After signing it, an ARN (Application Reference Number) is sent to the mobile number and email address you provided.
- Step 7: The process is complete; you can track the GST registration status using the ARN number.
Benefits of GST for MSMEs
There are the following benefits of complying GST for MSMEs:
- It might be challenging for an MSME to keep track of taxes paid at various levels and have them adjusted to fit government needs. However, with GST, even a minor transaction is automatically estimated with the applicable GST rate without complicated tax computations.
- By consolidating all taxes under GST, MSMEs will be exempt from having to register for several taxes and have greater freedom to engage in tax-free commerce.
- Due to GST, trade between corporations and between states is now unrestricted. For small and medium-sized businesses, which were formerly limited by a single identification number, it has opened up a unified national market.
Conclusion
Now you have the answer for ‘What is MSME,’ and understand if you need a GST number for MSME registration. Businesses in India that fall under small, micro and medium size categories need to have MSME registration. The MSME is a growing sector contributing to the country's economy. By registering for an MSME certificate, one can get various benefits such as tax exemption, government subsidies, etc.
