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MSME Service Sector List: Which Businesses Are Covered?

By IIFL Home Loans | Published On Jan 22 2024 6:07 AM 3 min read 26 views 142 Likes
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To encourage and incentivize small businesses, the government has provided classification to certain businesses as MSME businesses. Also known as Micro, Small, and Medium Enterprises, MSMEs in India have always remained a significant contributor to the economy. The share of the MSME businesses in India’s Gross Domestic Product (GDP) for the financial year 2021-22 was 29.2%. This highlights the importance of MSME businesses in the overall growth and development of the nation. You need to obtain UDYAM registration to be classified as an MSME business. But why you should obtain MSME registration? What are its benefits? Let’s find out!

Reasons to obtain MSME Registration

Before checking out the MSME list of companies, here’s why you should obtain MSME registration in India:

1) Collateral-Free Loans

To support MSME enterprises, the government has released various financing schemes. These schemes are aimed at providing affordable loans to MSME businesses without any collateral security requirement. Some of these schemes include Mudra Loans, Credit Guarantee Scheme, etc.

2) Affordable Bank Loans

Many banks and financial institutions provide affordable loans to MSME businesses. These loans come at low interest rates, have simple eligibility criteria, and are collateral-free.

3) Subsidies on Intellectual Property

The government has also made intellectual property registrations affordable for MSME enterprises by providing them concessions in governmental fees. Whether it's about patents or trademarks, you can apply for intellectual property registrations at a concessional cost if you are a registered MSME enterprise.

4) Favourable Laws

The government has incorporated numerous provisions to help MSME enterprises conduct businesses seamlessly. For instance, MSME law requires businesses to make MSME payments within 45 days. Further, it also provides for penal interest at three times the bank rate in case of delayed payments. Also, income tax law disallows expenses if payments of MSME businesses are outstanding.

Eligibility for MSME Registration

If you fall in one of the below categories, then you can apply for MSME registration with the Ministry of MSME:

Business Category

Investment in Plant and Machinery

Annual Turnover

Micro

Investment of up to ₹1 crore

Annual turnover less than ₹5 crores

Small

Investment between ₹1 crore and ₹10 crore

Annual turnover between ₹5 crores and ₹50 crores

Medium

Investment between ₹10 crores and ₹50 crores

Annual turnover between ₹50 crores and ₹250 crores

MSME Business List

MSME registration in India confers a lot of benefits among businesses. While the government has set the eligibility criteria based on investment and turnover requirements, are all businesses eligible for MSME registration?

The MSME sector covers most of the businesses in India. Here’s the MSME list of businesses:

  • Leather products

  • Moulding of products like combs, umbrella frames, plastic toys, etc.

  • Natural fragrance and flavours

  • Electronic surveillance and security

  • Automotive electronic component products

  • Retail trade businesses requiring low capital

  • Training and educational institute

  • STD/ISD booths

  • Servicing agricultural farm equipment including tractor, pump repairing, ring boring machine

  • IT solutions like creating a server bank, application service provider, smart card customisation, etc.

  • Placement and management consultancy services

  • Back-office operation relating to computerised data

  • Xeroxing

  • Channels dish cable TV with dish antenna

  • Laundry and dry cleaning

  • Beauty parlour and crèches

  • Recorders, VCRs, radios, transformers, motors, watches

  • Photographic lab

  • Toughened metallic ware

  • Mechanical engineering like steel almirahs, cocks, and valves, wire cutters, etc.

  • Energy efficient pumps

  • Micronutrients for plants

  • Engineering and fabrication

  • Handicraft activities like spinning, weaving, artisans

  • Active pharmaceutical ingredients and Ayurvedic products

  • Equipment rental and leasing

  • Khadi products and hosiery products

  • Auto repair services, and garages

  • Printing and other products made of paper

  • Coir industry

  • Furniture and wood products

  • Poultry farm

  • Bicycle parts

  • Auto businesses such as auto parts components like horn buttons, door channels, wiper blade components, battery cell tester

  • Call Centre

  • X-ray clinics

  • Rubber products

  • Stationery items

  • Ceramics and glass products include roofing tiles, glass flooring tiles, granite, etc.

  • Testing labs for industries

  • Retail and wholesale businesses

In a Nutshell

Obtaining MSME registration in India can unlock the doors for multiple benefits in India. Affordable loans, government schemes, and concessional IP registrations are some of the many benefits that MSME businesses enjoy. However, it is important to obtain Udyam registration to obtain these benefits. UDYAM is the official MSME registration certificate granted by the Ministry of Micro, Small, and Medium Enterprises in India.

Having obtained MSME registration, you can apply for secured business loans with IIFL Home Loans. Being a pioneering financial institution, IIFL Home Loans provides affordable business loans with simple-to-fulfil eligibility criteria and quick processing. Apply for a secured business loan now!

Frequently Asked Questions

Q1: Are there any businesses that do not fall under the MSME sector?

Ans: Yes. The following sectors do not fall under the MSME category list:

  • Betting and gambling activities

  • Aquaculture and fishing

  • Trading and repairing motorcycles

  • Logging and forestry

  • Activities of households for domestic personnel

  • Retail trade except for vehicles and motorcycles

  • Activities of extraterritorial organisations and bodies

  • Goods and services produced via private households for personal use

Q2: How to obtain an MSME certificate?

Ans: You can obtain an MSME certificate by applying for UDYAM registration in India. You can apply for the UDYAM registration by visiting the MSME registration portal.

Q3: What are the government fees for UDYAM MSME registration?

Ans: There are no government fees for MSME UDYAM registration.

Q4: How much time does it take to obtain MSME UDYAM registration?

Ans: UDYAM certificate is generated immediately after you apply for UDYAM registration.

Q5: Can we revise MSME registration details?

Ans: Yes, you can revise your MSME UDYAM registration details.

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