The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under:
Enterprises engaged within the manufacture or production, processing or preservation of products as specified below:

A micro enterprise is an enterprise where investment in plant and machinery doesn’t exceed Rs. 25 lakh;
A small enterprise is an enterprise where the investment in plant and machinery is quite Rs. 25 lakh but doesn’t exceed Rs. 5 crore;
A medium enterprise is an enterprise where the investment in plant and machinery is quite Rs.5 crore but doesn’t exceed Rs.10 crore.
In case of the above enterprises, investment in plant and machinery is that the original cost excluding land and building and therefore the items specified by the Ministry of Small Scale Industries wise
its notification No.S.O.1722(E) dated October 5, 2006 .

Enterprises engaged in providing or rendering of services and whose investment in equipment (original cost excluding land and building and furniture, fittings and other items indirectly associated with the service rendered or as could also be notified under the MSMED Act, 2006 are specified below.

A micro enterprise is an enterprise where the investment in equipment doesn’t exceed Rs. 10 lakh;
A small enterprise is an enterprise where the investment in equipment is quite Rs.10 lakh but doesn’t exceed Rs. 2 crore;
A medium enterprise is an enterprise where the investment in equipment is quite Rs. 2 crore but doesn’t exceed Rs. 5 crore

MSME Benefits

Higher Creditability
Lower Rate Of Interest
Tax Rebate
MAT Credit Utilized Enhanced

Benefits of MSME Registration
Higher creditability-MSME registered units get higher preference as compared to non-registered units.
Lower rate of Interest-the bank loans become less than interest on regular loans.
Tax Rebate-There are various tax rebates offered to MSME.
MAT credit utilized enhanced– It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to fifteen years rather than 10 years
Opportunities like apply to government tenders etc.

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