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MSME Registration
is also known as Micro Small Medium Enterprise, SME Registration, DIC Registration, SSI Registration. The registration under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 is for facilitating the promotion and development and enhancing the competitiveness of Micro, Small and Medium enterprises. Micro Small Medium Enterprise is known as MSME this is decided on the basis of Plant & Machinery or Equipments in the Unit or organisation.

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Micro, small and medium enterprises and Ancillary units should seek registration with the Director of Industries of the concerned State Government.The main purpose of Registration is to maintain statistics and maintain a roll of such units for the purposes of providing incentives and support services. States have generally adopted the uniform registration procedures as per the guidelines. However, there may be some modifications done by States. It must be noted that small industries is basically a state subject. States use the same registration scheme for implementing their own policies. It is possible that some states may have a 'SIDO registration scheme' and a 'State registration scheme'.


The registration scheme has no statutory basis. Units would normally get registered to avail some benefits, incentives or support given either by the Central or State Govt. The regime of incentives offered by the Centre generally contains the following: - Credit prescription (Priority sector lending), differential rates of interest etc. - Excise Exemption Scheme - Exemption under Direct Tax Laws. - Statutory support such as reservation and the Interest on Delayed Payments Act. (It is to be noted that the Banking Laws, Excise Law and the Direct Taxes Law have incorporated the word MSME in their exemption notifications. Though in many cases they may define it differently. However, generally the registration certificate issued by the registering authority is seen as proof of being MSME). States/UTs have their own package of facilities and incentives for small scale. They relate to development of industrial estates, tax subsidies, power tariff subsidies, capital investment subsidies and other support. Both the Centre and the State, whether under law or otherwise, target their incentives and support packages generally to units registered with them.


They are summarised as follows: - To enumerate and maintain a roll of small industries to which the package of incentives and support are targeted. - To provide a certificate enabling the units to avail statutory benefits mainly in terms of protection. - To serve the purpose of collection of statistics. - To create nodal centres at the Centre, State and District levels to promote MSME.


Features of the scheme are as follows:

  • DIC is the primary registering centre
  • Registration is voluntary and not compulsory.
  • Two types of registration is done in all States. First a provisional registration certificate is given. And after commencement of production, a permanent registration certificate is given.
  • PRC is normally valid for 5 years and permanent registration is given in perpetuity.
  • This is given for the pre-operative period and enables the units to obtain the term loans and working capital from financial institutions/banks under priority sector lending.
  • Obtain facilities for accommodation, land, other approvals etc.
  • Obtain various necessary NOCs and clearances from regulatory bodies such as Pollution Control Board, Labour Regulations etc.

Enables the unit to get the following incentives/concessions:

  • Excise exemptions
  • Income-Tax exemption and Sales Tax exemption as per State Govt. Policy.
  • Incentives and concessions in power tariff etc.
  • Price and purchase preference for goods produced.
  • Availability of raw material depending on existing policy.

Features of the present procedures are as follows:

Prior to the enactment of MSME's Act-2006, it was in practice to allot provisional and permanent Registration numbers to tiny, small and Medium scale industries. But after the enactment of the MSME's Act-2006 Micro, and Medium scale enterprises are being allotted E.M. Nos (Part-I and Part-II) and since then Registration of the industrial units have become irrelevant. For abstaining E.M. Nos, enterpreneunes have to apply to this office in prescribed from. E.M. Part-I is allotted to those enterprises which have not been started yet and E.M. Part-II is allotted to those units who have started their commercial production.
The following Factors form Basis of Evaluation:
  • The unit has obtained all necessary clearances whether statutory or administrative. e.g. drug license under drug control order, NOC from Pollution Control Board, if required etc.
  • Unit does not violate any locational restrictions in force, at the time of evaluation.
  • Value of plant and machinery is within prescribed limits.
  • Unit is not owned, controlled or subsidiary of any other industrial undertaking as per notification.

A Micro, small and medium Enterprises can violate the regulations in the following ways which will make it liable for de-registration:

  • It crosses the investment limits.
  • It starts manufacturing any new item or items that require an industrial license or other kind of statutory license.
  • It does not satisfy the condition of being owned, controlled or being a subsidiary of any other industrial undertaking