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MSME GST Registration in India

MSME GST Registration in India

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MSME GST Registration in India

The full form of MSME is Micro, Small, and Medium Enterprises and is formed as per Micro, Small, and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). As per this MSMED Act, these are divided into two namely:

  1. Manufacturing Enterprises, which are engaged in the manufacturing or production of goods belonging to different industries.
  2. Service Enterprises, that is providing or rendering services.

Classification of MSME

Micro Enterprise

In micro enterprises, the investment in plant and machinery does not exceed INR 1 Crore, along with the turnover earned during the year not exceeding INR 5 Crore.

Small Enterprise

This is the one in which the investment made in plant and machinery is not exceeding INR 10 Crore and the turnover earned during the year is not exceeding INR 50 Crore.

Medium Enterprise

Medium Enterprise is the one in which the investment in plant and machinery is not exceeding INR 50 Crore and the turnover earned during the year is not exceeding INR 250 Crore.

Features of MSME

Some of the important features which are held by MSME can be understood as follows:

  1. MSME is providing credit limits and also support by providing funds to banks in the country.
  2. MSME provides loans.
  3. MSME is also providing wider employment opportunities.
  4. MSME aids the up-gradation of technology, the infrastructure as well as the growth of the whole sector.
  5. MSME is also supporting new product and design development, innovation, and also bringing new packaging elements to the business.
  6. A reasonable access and assistance shall also be provided to the domestic and export markets for business entities.

MSME and Indian Economy

The MSME with its production of goods for the domestic as well as the international market is providing the Indian economy a major make over. This is being given by them through providing employment opportunities and enabling the industrialization of small and remote places of the country improving the living standard of the people. There is also a major contribution made by the MSMEs to the production on a domestic basis with low investment, operation flexibility, and low rate of imports.

GST for MSME

GST or Goods and Service Tax is a unified system of indirect taxes which allows the consumers to pay one tax on the goods or services or both bought by them. This also keeps at bay the problem which is arising from double taxation as the same was increasing the tax burden of the consumers and also increasing the difficulty of the tax compliance by the suppliers. So, we can say that GST was established by subsuming the following taxes namely:
– Service Tax
– Central Excise Duty
– Additional Excise Duty
– Countervailing and Additional Customs Duty
– VAT or Sales Tax
– Purchase Tax
– Luxury Tax
– Entertainment Tax
– Entry Tax
– Such other taxes.
Other than the following persons specified below, all the MSMEs are required to take registration under GST:

  1. Persons who are involved in the intra-state supply of taxable goods or services or both and the aggregate turnover earned during the relevant financial year is not exceeding the specified threshold limit of exemption as per the GST Act.
  2. Persons involved in an inter-state supply of services (alone and not goods) and the aggregate turnover earned is not exceeding the threshold limit prescribed by the GST Act for exempting such person from taking registration under GST.

Documents Required for GST Registration of MSME

The documents which would be required by MSME for the registration under GST shall be based on the type or constitution of the business. The same has been discussed below:

A Private Limited Company:

The documents would include the following:

  1. Certificate of Incorporation or Registration
  2. Copy of the PAN Card of the Company
  3. Copy of the Memorandum of Association (MOA) of the company
  4. Copy of Article of Association (AOA) of the company
  5. Copy of the bank statement of Current Account in the name of the company
  6. Declaration of Board of Directors (BOD)
  7. Copy of Board Resolution Passed
  8. PAN Card copy of Directors
  9. Aadhar Number or Passport Number of all Directors (an optional requirement)
  10. Copy of electricity bill or water bill or such other bill for the registered place of business
  11. NOC (No Objection Certificate) issued by the owner of the business premise if the same is taken on rent or lease
  12. Copy of rent agreement (commercial)
  13. Passport size photographs of all directors of the company.

Limited Liability Partnership (LLP)

  1. Certificate of Incorporation or Registration
  2. Copy of the PAN Card of Company
  3. Copy of the Memorandum of Association (MOA) of the company
  4. Copy of Article of Association (AOA) of the company
  5. Copy of the bank statement of Bank Account in the name of the company
  6. Declaration made by Designated Partner of LLP
  7. PAN Card copy of Partner’s
  8. Aadhar Number or Passport Number of Partners of LLP (an optional requirement)
  9. Copy of electricity bill or water bill or such other bill for the registered place of business
  10. NOC (No Objection Certificate) issued by the owner of the business premise if the same is taken on rent or lease
  11. Copy of rent agreement (commercial)
  12. Passport size photographs of all Partners of the LLP.

Proprietorship or Sole Proprietor Entity

  1. Certificate of Registration or Existing Certificate of Service Tax Registration or Shop Act License or Existing VAT or Sales Tax or Excise Duty Registration or such other certificate of existence
  2. Copy of PAN Card of the proprietor
  3. Copy of Bank Statement of entity current account or the personal savings account of the proprietor
  4. Declaration given by the proprietor
  5. Aadhar card or Passport details of the proprietor (optional requirement)
  6. Copy of electricity bill or water bill or such other bill for the registered place of business
  7. NOC (No Objection Certificate) issued by the owner of the business premise if the same is taken on rent or lease
  8. Copy of rental agreement (commercial)
  9. Passport size photograph of the proprietor.

Hence, we can now conclude that the MSMEs involved in the supply of goods or services or both should take registration under GST if they are earning a turnover over and above the threshold limit specified by the GST Act for providing the exemption.
 
 

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