Benefits of MSME registration

Registering your business can fetch numerous benefits. Some of these are:

• Get bank loans at the lowest interest rates (around 1-1.5% lower) with ease
• Avail of tax benefits by taking credit for MAT (minimum alternate tax) for up to 15 years
• Concessions & rebates on setting up an industry or getting patents
• Reimburse ISO Certification fees
• Registered MSMEs get preference for government tenders
• State governments support MSMEs
• Leverage government schemes like Credit Linked Capital Subsidy Schemes, Credit Guarantee Schemes, etc.
• Get priority sector loans from banks
• Avail of bar code registration subsidy
• Concession on MSME electricity bill
• Special consideration for International Trade fairs

How to register your MSME online

• MSME online registration process for new businesses or those with EM-II

You can register your MSME on the Udyog Aadhaar Memorandum (UAM) portal. Here’s how to apply for MSME Udyam registration online:

1. Visit the MSME Udyam registration web portal.
2. For new or unregistered businesses, click on the first link – “For new entrepreneurs who are not registered yet as MSME or those with EM-II”.
3. Submit your Aadhaar Number and name.
4. Then tick the consent button and click on the ‘Validate & Generate OTP’ button.
5. On the next page, submit details of your PAN and organization type. If you don’t have PAN, select the ‘No’ option.
6. Fill in the rest of the fields on the form.
7. Enter the OTP received on your phone number and verification code to submit the form.
8. On successful registration, a “Thank You” message will appear with your registration number.

It may take 2-3 days to get approval for your MSME’s registration. On approval, you will receive a registration certificate via email.

• MSME online registration process for businesses with UAM

1. Visit the govt portal (UAM portal).
2. For UAM-registered businesses, click on the respective link to access the migration form.
3. On the next page, enter your Udyog Aadhaar number, select an OTP option and click on the ‘Validate & Generate OTP’ button.
4. Enter the OTP received on your registered mobile number or email ID.
5. Fill in the MSME Udyam registration form and submit it.

It may take 2-3 days to get approval for your MSME’s registration migration. On approval, you will receive a registration certificate via email.

MSME registration fees and documents

The MSME registration process does not require extensive documentation. All you need is your Aadhaar number. Details related to your PAN- and GST- linked investments and turnover will be automatically sourced from government databases. You also do not need to pay any fees to get your MSME registered through the Udyam portal.

How to download the MSME registration certificate

Once your MSME is successfully registered, you will receive a permanent registration number and an e-certificate. The MSME registration certificate requires no renewals as it has lifetime validity unless you get it canceled. It features a dynamic QR code linked to the Udyam portal, where you can access details regarding your enterprise.

Check your inbox and spam folder to see if you have received the certificate. But if at any point you need to download the certificate, follow these steps:

1. Go to the Udyam Registration portal.
2. Go to the “Print/Verify” drop-down button on the top menu bar.
3. Click on “Print Udyam Certificate”. This will take you to a login page if you aren’t already logged in.
4. Here, enter your Udyam registration and registered mobile numbers.
5. Choose the preferred option in the third field and press “Validate & Generate OTP”.
6. Enter the OPT you received in the next field and press “Validate OTP and Login”.
7. You will see your Udyam Certificate on the next page. Download or print it from here.

Register your MSME to accelerate its growth

MSMEs contribute enormously to our country’s socioeconomic development. This sector plays an important role in generating a huge number of employment opportunities at low costs. It also helps reduce regional economic imbalances by industrializing and generating more income from rural areas. Register your MSME to enjoy the many benefits that can help you take your business to new heights.

The post MSME Registration in India: Everything you need to know appeared first on PayU Blog.

But with GST coming into the scene, the Union Budget only spoke of import duty and no other indirect taxes. So today, the budget presentation focuses more on direct taxes and their implication on corporations and individuals.

This article discusses direct and indirect taxes for corporations in India.

What are Direct and Indirect Taxes?

Even though payable by the organization, direct and indirect taxes are vastly different from each other.

Taxes are mainly classified into two categories – direct and indirect.

As the name suggests, direct taxes are paid by the companies to the government directly. Even, the taxes can’t be passed on to other entities. Income tax is the direct tax on the earnings of a company. These are not passable and will be borne by the entity liable to pay. In most cases, domestic companies are responsible for paying a flat 30% along with a surcharge (if applicable) on their earnings. In comparison, foreign companies have to bear a more stringent tax rate of 40% on their income along with a surcharge (If any).

On the other hand, indirect taxes are charged on the sale of any product or service. These won’t come into the picture if you do not sell anything deemed taxable by the government. Previously, VAT and Service Tax were charged on the sale of goods and services, respectively. With the inclusion of GST, there is a single tax for a majority of offerings.

Difference Between Direct & Indirect Tax

While the responsibility of paying indirect and direct taxes lies with the corporate house, there are some stark differences between these two:

• Even though direct and indirect taxes are levied on all eligible entities, the end consumer bears indirect tax, whereas each entity is eligible to pay its share of direct taxes.
• Direct tax is a single-stage tax applicable on certain transactions or income of the company. In contrast, indirect tax is a multi-stage tax levied on each stage of production and distribution of the offering.
• Direct taxes are non-transferable, whereas indirect taxes are transferable. Therefore, the entity that pays indirect tax for buying an offering can claim it as input tax in most cases.
• A corporate house can generate income tax benefits by investing in tax saving instruments or fulfilling specific criteria established by the government. But there is no way to evade indirect taxes or reduce its liability.

Types of Direct & Indirect Tax

There are a plethora of direct and indirect taxes applicable to companies operating in India.

Types of Direct Taxes

Corporate direct tax is taxable on income by the company in India. It includes the following:

• Profits and gains from business and profession
• Capital gains
• Earnings from house property
• Earnings from other sources

Types of Indirect Taxes

In addition, companies are also liable to pay the following indirect taxes (if applicable):

• Securities Transaction Tax (STT) on the sale of securities listed on the stock exchanges in India. It includes shares, stocks, scrips, derivatives, Equity Linked Savings Scheme, and more.
• Dividend Distribution Tax (DDT) on payment of dividends to shareholders
• Minimum Alternate Tax (MAT), if the entity is a zero tax company opting to pay taxes under the MAT structure.

As for indirect taxes, GST (Goods and Services Tax) is the major contributor for entities. It subsumed a host of indirect taxes that prevailed before. India follows a dual structure where the center and the states or union territories can share the inflow pre-decidedly.

GST is levied on a taxable event, such as sale, transfer, disposal, rent, etc., of offerings for consideration in cash or kind and requires state-wise registration. While some essentials are under the 0% tax slab, there are four primary tax slabs for GST calculation and return – 5%, 12%, 18%, and 28%. It is a far cry from implementation by most other countries that have a uniform rate to ensure a seamless tax structure for a business.

In addition, companies are also liable to deduct professional tax from the salaries of their employees. The amount depends on information about professional tax applicability and the gratuities received by each salaried individual.

If any business is into importing or exporting goods, they are liable to pay customs duty to the government as an indirect tax. India follows the universally acknowledged harmonized nomenclature (HSN) classification rules that state the duty payable.

The final indirect taxation prevalent in India is known as VAT (Value Added Tax). It is only applicable today on liquor and tobacco or the product’s price and paid by the companies dealing with such offerings.

Conclusion

India has a deep-rooted structural issue where it has failed miserably in ensuring a clutter-free tax regime for corporations. The introduction of GST was a golden opportunity to set things right. On the other hand, ample rates for it brought about the same ambiguity which was quite prevalent earlier.

So, we often experience corporates, especially MSMEs, suffering from tax fatigue or the inability to handle their tax liabilities well. Therefore, there is a need to implement robust IT solutions, such as a tax-integrated payment gateway, that would enable them to handle their tax more efficiently.

PayU India offers a fully integrated, powerful payment solution provider for your offline and online presence. Moreover, it is GST-ready, so our omnichannel solution seamlessly handles most of your indirect tax needs.

Click here to get rid of your tax hassles by imbibing PayU India for your daily transactions.

The post Decode Direct and Indirect Taxes for MSMEs in India appeared first on PayU Blog.