MSMEs are the driving force behind any economy, and India is no exception. Recognising their significance, the Government of India has launched various initiatives to aid in their expansion and progress. Udyog Aadhaar and Udyam Aadhaar are two such initiatives that aim to provide various benefits to small businesses.
Difference between Udyog Aadhaar and Udyam enrollment
In September 2015, the Indian government introduced the Udyog Aadhaar, also known as Aadhaar for business, that assigned MSMEs with a unique 12-digit identification number upon registration. Once assigned, this registration number allowed MSMEs to avail of the benefits of various government schemes, incentives, and subsidies. In July 2020, this process the new and simplified Udyam registration replaced this process. The key areas of difference between the Udyog Aadhaar and Udyam registration are as follows:
Procuring your Udyam certificate is a paperless process. This is because the registration is completely online through the official government portal https://udyamregistration.gov.in/, which charges zero fees. The certificate received arrives as a soft-copy via e-mail. It contains a QR code that helps verify the certificate and access details about the enterprise.
The government portal is user-friendly and the registration form is short, making the process much less time-consuming as you can complete it in a single window.
The Udyam registration requires no documents or proof as it is entirely based on self-declaration.
To register for an Udyam certificate, you need only the Aadhaar number of the owner or authorised signatory of the enterprise. This means, unlike earlier, you no longer need to fill in GST and income tax-related details.
It is crucial for the registered Aadhaar number to have a link with a valid mobile number. You can only register a single enterprise under a single Aadhaar card. However, it is possible to specify various activities related to production, services, or both under the same registration.
The most important difference between Udyam and Udyog Aadhaar registration processes is that the former offers greater clarity and seamlessness. This makes it simpler, more accessible, and less prone to user errors. Thus, there are fewer rejections and more successful registrations.
Benefits of Udyam registration
As its predecessor, the Udyam registration affords multiple benefits intended to promote the growth and development of MSMEs:
- Collateral-free bank loans and interest rate subsidies
- Protection against delayed payments and faster dispute resolutions
- Easier obtainment of licences, registrations, and approvals
- Special reservation in manufacturing/ production sector
- Various exemptions under direct tax law
- Concessions on electricity bills
- Preference in procurement of government tenders through waiver of EMD
- Subsidies on stamp duty and registration fees, barcode registration, and patent registration
- Eligibility for credit-linked capital subsidy scheme (CLCSS) and industrial promotion subsidy (IPS)
- Reimbursement of ISO certification fees
- 1% exemption on OD interest
- Special consideration for the international trade fair
Additional Read: Difference Between Udyog Aadhaar and Udyam Registration
Additional Read: How to migrate Udyog Aadhaar to Udyam registration
