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Are you a businessman in eCommerce or keen to venture into the eCommerce space? Are you aware that you can register your eCommerce business as an MSME or obtain Udyam registration to reap various benefits?
Internet and smartphone users in India are increasing rapidly. This is leading to increased user base of eCommerce. This definitely provides an opportunity for business owners to grow by taking their business online. However, while you keep an eye on market opportunities, it is also important to know about registrations and compliances. This article will talk about how you can register your eCommerce business as an MSME and why you should do it.
What is an eCommerce business?
An electronic commerce better known as eCommerce is a business model wherein sales take place over the internet. In other words, the buyer sees a product or service online and place an order digitally.
If your company is involved in providing services or products through the medium of the internet, you are an eCommerce company. Popular examples of eCommerce marketplaces include Amazon, Flipkart, Nykaa, Big Basket, etc. The government of India also has Government e-Marketplace – GeM for online buying and selling and finding new tendering opportunities.
How to register your eCommerce business as an MSME?
As per the MSMED Act, if your business’ turnover is less than ₹250 crore and investment in plant and machinery is up to ₹50 crore, you are eligible to apply for MSME registration. Here are the criteria of classification:
|Category||Turnover criteria||Investment criteria|
|Micro enterprise||Less than ₹5 crore||Up to ₹1 crore|
|Small enterprise||Less than ₹50 crore||Up to ₹10 crore|
|Medium enterprise||Less than ₹250 crore||Up to ₹50 crore|
Steps for MSME/Udyam registration for ecommerce business:
The process of Udyam or MSME registration for eCommerce companies is similar to other MSMEs. It is completely online and fairly simple.
- Visit the Udyam registration portal and click on the option ‘For new entrepreneurs who are not registered yet as MSME or those with EM-II’.
- Enter required such as Aadhaar number and name of the business owner and click on ‘Validate & Generate OTP’.
- Enter the OTP that you receive on the mobile number associated with the Aadhaar card and click on ‘Validate’.
- The next step is PAN verification. Enter details such as type of organisation, PAN number and click on Validate button.
- Select if you have filed ITR for previous year and if you have a GSTIN.
- Fill the form by entering other details such as name of the businessowner, name of the company, location, address, bank details. Mention your business activity as ‘Ecommerce’. The form contains more information including NIC code for business and number of employees.
- Enter investment and turnover details and click on ‘Submit and Get Final OTP’ button.
- Enter OTP and you will receive e-registration certificate via email.
Once you receive the MSME/Udyam certification, you can print it too.
Note: MSME registration process is completely online and free. The government of India does not ask for any kind of fee for registration.
Why should ecommerce business obtain Udyam registration certificate?
Udyam registration offers various benefits to eCommerce businesses. Key benefits of MSME registration are mentioned below:
- Your business becomes eligible for availing government schemes that are launched specifically for MSMEs.
- You become eligible for obtaining loan schemes that are designed for MSMEs and have attractive interest rates.
- You can avail tax concessions.
- If you are planning to get an ISO certificate, your certification expenses will be refunded.
It is not mandatory for any eCommerce business to obtain Udyam registration. However, the process is hassle-free and benefits for registration are immense. As a result, it is advisable for your business to register on Udyam portal and obtain certification.