Registration of Small Scale Industries(SSIs)

Registration of an existing or proposed small scale enterprise is voluntary and not compulsory. It has no statutory basis. But, registration is beneficial for the enterprise itself because it makes the unit eligible for availing the benefits given by the Central or State Governments for the promotion of SSIs. Some of the incentives so obtained by them relate to credit guarantee scheme; priority sector lending; capital subsidy; reduced customs duty; ISO-9000 certification reimbursement; power tariff subsidies; exemptions under tax laws; etc.

The State Directorate or Commissioner of Industries or District Industries Centres (DIC's) are the concerned authorities for registration of small scale units. This registration is both location specific and product specific. Like in certain State capitals and metropolitan cities, it is granted to only those units which are located in the designated industrial areas/estates.

A small scale unit is generally subjected to two types of registration. Initially, a provisional registration is granted for the proposed enterprise. It is termed provisional because the enterprise is yet to come into existence. It is granted for a specified period of time during which the unit is expected to be setup. A 'Provisional Registration Certificate (PRC)' enables the unit to obtain :- (i) term loans and working capital from financial institutions, banks under priority sector lending; (ii) facilities for accommodation, land and other approvals; (iii) no objection certificates (NOCs) and clearances from regulatory bodies such as pollution control board, labour regulations, etc.

Once the unit has commenced commercial production, it is granted permanent registration. It is a life time registration given after physical inspection of the enterprise and scrutiny of certain documents. Some of the formalities required to be completed for seeking permanent registration are :-

Clearance from the municipal corporation

State pollution control board clearance

Sanction from the electricity board

Ownership/tenancy rights of the premises where unit is located

Copy of partnership deed/Memorandum of articles of association in case of a private limited company

Sale bill of product manufactured

Sale bill of each end product

Purchase bill of each raw material

Purchase bill of machinery installed

BIS/QC certificate if applicable

An affidavit giving status of the unit, machinery installed, power requirement, etc.

The registration certificate so issued by the concerned authority is seen as a proof of the unit being a small scale unit. It enables the unit to get several concessions like :-

Income tax exemption and Sales tax exemption as per the State Government policy.

Incentives and concessions in power tariff, etc.

Price and purchase preference for goods produced.

Availability of raw material depending on existing policy.

Though, provisional registration is not compulsory for getting a permanent registration. But, a provisional certificate enables the unit to apply to the various departments and agencies for assistance in setting up of the enterprise.

Such a registration procedures is generally uniform across the States. However, there may be some modifications done by individual States. For example, certain States may have a 'SIDO registration scheme' and a 'State registration scheme'. But, whatever be the registration scheme, the main purpose is to maintain statistics and a roll of such units for providing incentives as well as to create nodal centres at the Centre, State and District levels to promote SSIs. It gives recognition to the industrial unit and helps in generating a database for policy planning.

A small scale unit may also become liable for de-registration, if it crosses the investment limits; starts manufacturing any new item or items that require an industrial license or other kind of statutory license; or does not satisfy the condition of being owned, controlled or being a subsidiary of any other industrial undertaking.

SSI Registration

Small Scale and ancillary units (i.e. undertaking with investment in plant and machinery of less than Rs. 10 million) should seek registration with the Director of Industries of the concerned State Government.

Registering your SSI Unit

The main purpose of Registration is to maintain statistics and maintain a roll of such units for the purposes of providing incentives and support services.

States have generally adopted the uniform registration procedures as per the guidelines. However, there may be some modifications done by States. It must be noted that small industries is basically a state subject. States use the same registration scheme for implementing their own policies. It is possible that some states may have a 'SIDO registration scheme' and a 'State registration scheme'.

Benefits of Registering Objectives and Features Provisional Registration Permanent Registration Procedure De-registration 

Download Registration Forms & Related Documents (Proformas)Application for Provisional Registration Provisional Registration Certificate Application for Permanent Registration Certificate of Registration

Additional Sheet-1 (for Additions/Deletions) Appendix "A" (Production Details Appendix "B" (Details of Plant and Machinery Affidavit

Benefits of Registering

The registration scheme has no statutory basis. Units would normally get registered to avail some benefits, incentives or support given either by the Central or State Govt. The regime of incentives offered by the Centre generally contains the following:

 - Credit prescription (Priority sector lending), differential rates of interest etc.  - Excise Exemption Scheme  - Exemption under Direct Tax Laws.  - Statutory support such as reservation and the Interest on Delayed Payments Act.

(It is to be noted that the Banking Laws, Excise Law and the Direct Taxes Law have incorporated the word SSI in their exemption notifications. Though in many cases they may define it differently. However, generally the registration certificate issued by the registering authority is seen as proof of being SSI).

States/UTs have their own package of facilities and incentives for small scale. They relate to development of industrial estates, tax subsidies, power tariff subsidies, capital investment subsidies and other support. Both the Centre and the State, whether under law or otherwise, target their incentives and support packages generally to units registered with them.

Objectives of the Registration Scheme

 They are summarised as follows:

To enumerate and maintain a roll of small industries to which the package of incentives and support are targeted. To provide a certificate enabling the units to avail statutory benefits mainly in terms of protection. To serve the purpose of collection of statistics. To create nodal centres at the Centre, State and District levels to promote SSI.

Features of the Scheme

Features of the scheme are as follows:

DIC is the primary registering centre Registration is voluntary and not compulsory. Two types of registration is done in all States. First a provisional registration certificate is given. And after commencement of production, a permanent registration certificate is given. PRC is normally valid for 5 years and permanent registration is given in perpetuity.

Provisional Registration Certificate (PRC)

This is given for the pre-operative period and enables the units to obtain the term loans and working capital from financial institutions/banks under priority sector lending. Obtain facilities for accommodation, land, other approvals etc. Obtain various necessary NOCs and clearances from regulatory bodies such as Pollution Control Board, Labour Regulations etc.

Permanent Registration Certificate

Enables the unit to get the following incentives/concessions:

Income-Tax exemption and Sales Tax exemption as per State Govt. Policy. Incentives and concessions in power tariff etc. Price and purchase preference for goods produced. Availability of raw material depending on existing policy. Permanent registration of tiny units should be renewed after 5 years.

Procedure for Registration

Features of the present procedures are as follows:

A unit can apply for PRC for any item that does not require industrial license which means items listed in Schedule-III and items not listed in Schedule-I or Schedule-II of the licencing Exemption Notification. Units employing less than 50/100 workers with/without power can apply for registration even for those items included in Schedule-II. Unit applies for PRC in prescribed application form. No field enquiry is done and PRC is issued. PRC is valid for five years. If the entrepreneur is unable to set up the unit in this period, he can apply afresh at the end of five years period. Once the unit commences production, it has to apply for permanent registration on the prescribed form.

The following form basis of evaluation:

The unit has obtained all necessary clearances whether statutory or administrative. e.g. drug license under drug control order, NOC from Pollution Control Board, if required etc. Unit does not violate any locational restrictions in force, at the time of evaluation. Value of plant and machinery is within prescribed limits. Unit is not owned, controlled or subsidiary of any other industrial undertaking as per notification.

De-Registration

A Small Scale Unit can violate the regulations in the following ways which will make it liable for de-registration:

It crosses the investment limits. It starts manufacturing any new item or items that require an industrial license or other kind of statutory license. It does not satisfy the condition of being owned, controlled or being a subsidiary of any other industrial undertaking.

Registration of Small Scale Industrial Units  

The Scheme of voluntary registration of Small Scale, Village and Cottage Industries with the State Directorate of Industries was introduced in 1960 and such registered industrial units were made eligible for different types of assistances by the Governmental Agencies. Initially a uniform norm for registration were not laid down with the result that some of the States had granted different registration numbers to different lines of manufacturing processes to the same unit thereby resulting in multiple registration.  

Therefore to avoid such anomalies a uniform set of Application Forms for both Provisional as well as Permanent Registration were evolved out at the time of introduction of the revised procedure of registration of these sectors of industrial undertakings in 1975. With the passage of time, the Government of India, Ministry of Commerce and Industries further simplified the procedures by simplification of the forms for registration and also introduced the coded system to indicate the State, Districts and the unit's serial number so as to facilitate computerisation of the whole system of SSI registration, in 1989.  

Registration of Small Scale, Village and Cottage industries are done under two stages, viz-  

i. Provisional andii. Permanent Registration

Provisional Registration : Provisional registration is granted to a unit at its pre- investment period to enable it to take necessary steps to apply for financial credit, land or an industrial set, water, power or telephone connections, etc.  

Permanent / Final Registration : A provisionally registered industrial unit when it is about to go into production is to apply for grant of Permanent / Final Registration. An existing and functioning industrial unit is eligible to apply for Permanent / Final Registration without going into provisional registration processes.  

The District wise SSI Registration of the State is given in Table below:-

Districts Wise Yearly Registration of SSI Units.

Sl. No. YearEast Khasi Hills

West Khasi Hills 

Ri Bhoi Jaintia Hills 

West Garo Hills 

East Garo Hills

South Garo Hills

Total

1. 1975 – 76 2 - - - - - - 22. 1976 – 77 13 - - 5 - - - 183. 1977 – 78 14 - - - - - - 144. 1978 – 79 11 - - - - - - 115. 1979 – 80 9 - - - - - - 96. 1980 – 81 72 1 - 5 28 6 - 1127. 1981 – 82 45 13 - 18 - - - 768. 1982 – 83 64 5 - 10 7 11 - 979. 1983 – 84 50 2 - 12 25 10 - 9910. 1984 – 85 33 - - 19 18 8 - 7811. 1985 – 86 72 7 - 17 13 21 - 13012. 1986 – 87 54 17 - 24 24 12 - 13113. 1987 – 88 95 27 - 22 15 9 - 26014. 1988 – 89 137 62 - 29 20 12 - 26015. 1989 – 90 62 34 - 22 14 2 - 13416. 1990 – 91 61 72 - 22 16 22 - 19317. 1991 – 92 74 40 - 15 21 25 - 17518. 1992 – 93 112 41 - 19 17 19 - 20819. 1993 – 94 67 39 - 23 11 13 - 15320. 1994 – 95 63 40 10 35 17 19 16 20021. 1995 – 96 75 76 12 31 8 29 8 23922. 1996 – 97 80 41 19 33 18 25 16 23223. 1997 – 98 72 49 23 39 29 22 9 24324. 1998 – 99 69 49 27 37 32 32 19 26525. 1999 – 00 76 58 24 41 26 24 9 25826. 2000 – 01 43 160 18 38 7 5 2 27327. 2001 – 02 88 50 26 33 25 44 - 26628. 2002 – 03 81 49 23 37 23 35 20 26829. 2003 – 04 115 21 27 35 14 32 8 323

Total 1809 953 209 621 428 437 107 4564

Year Wise SSI Registration With Employment Details.

Sl. No. YearNos. of

UnitsRegistered

Investment in plant / Machinery (Rs. in lakhs)

Employment Generation

1. 1975 – 76 2 0.77 212. 1976 – 77 18 8.27 1413. 1977 – 78 14 6.69 2044. 1978 – 79 11 11.08 1005. 1979 – 80 9 5.11 916. 1980 – 81 112 74.43 8787. 1981 – 82 76 23.63 5548. 1982 – 83 97 51.36 6569. 1983 – 84 99 25.42 573

10. 1984 – 85 78 22.11 37611. 1985 – 86 130 48.11 67912. 1986 – 87 131 71.11 709

13. 1987 – 88 260 126.70 104814. 1988 – 89 260 133.85 142815. 1989 – 90 134 91.75 72316. 1990 – 91 193 149.88 106717. 1991 – 92 175 82.28 92118. 1992 – 93 208 205.79 104319. 1993 – 94 153 146.40 83020. 1994 – 95 200 229.04 144121. 1995 – 96 239 217.00 130822. 1996 – 97 232 260.65 131323. 1997 – 98 243 258.05 115524. 1998 – 99 265 218.39 133425. 1999 – 00 258 484.60 149926. 2000 – 01 273 297.00 133027. 2001 – 02 266 667.18 163828. 2002 – 03 268 668.00 141629. 2003 – 04 323 702.00 1805

Total 4564 5286.65 26281