Registrations to a Small Scale Industry is granted by the State Directorates of Industries as per the guidelines issued by the Development Commissioner (SSI), Ministry of Industry, Department of Small Scale Industries and Agro & Rural Industries, Govt. of India, New Delhi. The classification of activities and size of investment in fixed assets of plant & machinery for SSI are governed by the provisions of Industrial (Development & Regulation) Act, 1951.
The SSI Board under the chairmanship of the Prime Minster and the Small Industries Development Organization (SIDO) articulate various policies for the development of SSI sector. A large number of products are reserved for exclusive manufacture by SSI sector in order to protect small scale industry from large industry.
SSI registration can be obtained by both manufacturing units and service-rendering enterprises.
However, the registration eligibility criteria differ for SSI units in manufacturing and SSI units in service rendering as follows:-
Micro Enterprises: Investment of up to Rs.25 lakhs in plant and machinery.
Small Enterprises: Investment of up to Rs.5 crores in plant and machinery.
Medium Enterprises: Investment of up to Rs.10 crores in plant and machinery.
Step 1: Provisional SSI Registration:-
To obtain SSI registration the business must first apply for Provisional SSI Registration Certificate (PRC). Provisional Registration Certificate is given when the unit is in a pre – operative period and helps the SSI unit obtain term loans and working capital from financial institutions/banks under priority sector lending. In addition to helping obtain a bank loan, the provisional SSI registration certificate also helps the business obtain facilities for accommodation, land, other approvals etc. and obtain various necessary NOC’s and clearances from regulatory bodies such as Pollution Control Board, Labor Regulations etc.
Provisional SSI registration can be applied for by a business at any time and an industrial license is not required. Once an application is made for Provisional SSI registration, the provisional registration is provided and no field inquiry is done. Provisional SSI registrations are valid for five years and if the entrepreneur is unable to set up the unit in this period, a fresh application for provisional registration can be made at the end of five years period.
Step 2: Start the Business:- Start the business with the provisional SSI registration certificate. Commence activity or production.
Step 3: Permanent SSI Registration:-
Once the business commences production or activity, the business can apply for and obtain permanent SSI registration. Obtaining permanent SSI registration will help the business obtain the following benefits:
Income-Tax exemption and Sales Tax exemption as per State Government Policy.
Incentives and concessions in power tariff as per State Government Policy.
Price and purchase preference for goods produced.
Availability of raw material depending on existing policy.
Permanent SSI registration will be provided only if the following conditions are satisfied by the SSI unit:-
1.The unit has obtained all necessary clearances whether statutory or administrative,
2. The unit does not violate any restrictions in force,
3. Value of plant and machinery is within prescribed limits and,
4. The unit is not owned, controlled or subsidiary of any other industrial undertaking as per notification.
To register a Small Scale industry, Contact LegalRaasta.