Industrial Services

Classification of Industries

In India, the enterprises have been classified broadly into two categories.

• Manufacturing
• Those engaged in providing/rendering of services.

Both categories of enterprises have been further classified into micro, small, medium and large scale enterprises based on their investment in plant and machinery (for manufacturing enterprises) or on equipments (in case of enterprises providing or rendering services).

The present ceiling on investment to be classified as micro, small, medium or large scale enterprises is as under:

Large Scale Enterprises are the Industries whose investment in Plant and Machinery is above Rs 10 Crores for Manufacturing Enterprises and above Rs 5 Crores for Service Enterprises.

Note: Please note that above investments do not include cost of land and building.

Micro, Small, Medium Enterprise Registration - Entrepreneur Memorandum

The Micro Small & Medium Enterprises Development (MSMED) Act 2006 was become operational from 2nd October 2006. The Act replaces the concept of "Industry" with "Enterprises".

Consequent to the implementation of this act, SSI Registration process has been dispensed with. The entrepreneur files the Entrepreneur Memorandum (EM) and gets an acknowledgement.

You can download the Entrepreneur Memorandum by clicking PDF icon below.

Notes: (Only Indicative. Refer Schedule II for details. It is subject to change.)

1. The form of Memorandum is in two parts. Any person who intends to establish a micro, small or medium enterprise engaged in providing or rendering of services may file or those who want to establish medium enterprise engaged in the production or manufacture of products shall file Part I of the Entrepreneurs Memorandum to District Industries Centre.

2. Once the above enterprises start production or start providing or rendering services, they shall file Part II of the Entrepreneurs Memorandum to District Industries Centre.

3. In case of non-filing of Part II of the Entrepreneurs Memorandum within two years of the filing of Part I, the Memorandum (Part I) filed by the entrepreneur will become invalid.

4. The Acknowledged Entrepreneurs' Memorandum shall be liable to be cancelled in case the unit is found closed for more than 6 months or furnished wrong information in the Entrepreneurs' Memorandum filed.

ASCC Service Offering: ASCC will liaise with District Industrial Centre (DIC) in respective state to help you with the MSME Entrepreneur Memorandum Registration (Formerly - SSI and MSI Registration).

Licensing Policy - Applicable to Micro, Small, Medium and Large Enterprise

The major impact of liberalisation and globalisation of economy, which started in India in July, 1991, was to do away with the Compulsory Licensing. As of now only FOUR industries are reserved for the Public Sector and only SIX industries fall under the compulsory licensing, as detailed below:

LIST OF INDUSTRIES RESERVED FOR THE PUBLIC SECTOR

• Arms and ammunition and allied items of defence equipment, Defence aircraft and warships.
• Atomic energy
• The substances specified in the scheduled to the notification of the Government of India in the Department of Atomic Energy number S.O.212(E), dated the 15th March, 1995.
• Railway transport.

LIST OF INDUSTRIES FOR WHICH INDUSTRIAL LICENSING IS COMPULSORY

• Distillation and brewing of alcoholic drinks.
• Cigars and Cigarettes of tobacco and manufactured tobacco substitutes.
• Electronic Aerospace and Defence equipment: all types.
• Industrial explosives including detonating fuses, safely fuses, gun powder, nitrocellulose and matches.
• Hazardous chemicals.
• Drugs and Pharmaceuticals (according to modified Drug Policy issued in September, 1994).

Note: In case of the small units which employ less than 50 workers with power or less than 100 workers without power are not required to obtain any license under Compulsory Licensing Provisions.

Micro & Small Enterprise (MSE) - Reserved Items List

As on 10 October 2008, following items are reserved for exclusive manufacture by micro and small enterprise sector (Sample List):

• Food and Allied Industries: Pickles & Chutneys, Bread, Mustard Oil (except solvent extracted), Ground nut oil (except solvent extracted).
• Wood and Wood Products: Wooden furniture and fixtures.
• Paper Products: Exercise books and registers.
• Injection Moulding Thermo Plastic Product: PVC Pipes, including conduits up to 110 mm dia, Fittings for PVC pipes.
• Other Chemicals & Chemical Products: Wax candles, Laundry soap, Safety matches, Fireworks, Agarbatties.
• Glass & Ceramics: Glass Bangles.
• Mechanical Engg. Excluding Transport Equipment: Steel almirah, Rolling shutters, Steel chairs - all types, Steel tables - all types, Steel furniture - all types, Padlocks, Stainless steel utensils, Domestic utensils - Aluminium.

Industrial Licensing

Industrial Licenses are regulated under the Industries (Development & Regulation) Act, 1951. Industrial Licence is granted by the Government of India in the Secretariat for Industrial Assistance (SIA) on the recommendation of the Licensing Committee. With progressive liberalization and deregulation of the economy the requirement of industrial licensing has been substantially reduced. At present industrial licence for manufacturing is required only for the following:

• Industries retained under compulsory licensing.
• Manufacture of items reserved for Micro and Small Enterprise sector by Medium and Large Enterprise.
• When the proposed location attracts locational restriction.
• Industries reserved for the Public Sector.

Note: Medium and Large Enterprise units can manufacture items reserved for the Micro and Small Enterprise sector only after obtaining an industrial license. In such cases, the Medium and Large Enterprise unit is required to undertake an obligation to export 50 per cent of the production of Micro and Small Enterprise reserved items.

Locational Restrictions

Industrial undertakings are free to select the location of their projects. Industrial License is required if the proposed location is within 25 KM of the Standard Urban Area limits of 23 cities having population of 1 million as per 1991 census. These cities are Urban area limits of Greater Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Bangalore, Ahmedabad, Pune, Kanpur, Nagpur, Lucknow, Surat, Jaipur, Kochi, Coimbatore, Vadodara, Indore, Patna, Madurai, Bhopal, Visakhapatnam, Varanasi and Municipal Corporation limits of Ludhiana.

The Locational restriction does not apply:

• If the unit was to be located in an area designated as an 'industrial area' before the 25th July, 1991.
• In the case of Electronics, Computer software and Printing and any other industry, which may be notified in future as "non polluting industry".
• The location of industrial units is subject to applicable local zoning and land use regulations and environmental regulations.

Procedure for Obtaining Industrial License

Industrial License is granted by the Secretariat for Industrial Assistance (SIA) on the recommendation of the Licensing Committee. Application needs to be submitted to PR&C section of SIA in the prescribed format (Form : FC-IL). Form FC-IL should be accompanied with a crossed demand draft of Rs 2500/-. Decision by SIA is usually taken within 4-8 weeks of filing the application.

You can download the FC-IL by clicking PDF icon below.

ASCC Service Offering: ASCC will liaise with Secretariat for Industrial Assistance (SIA) in New Delhi to help you with the Industrial License. ASCC does not guarantee that you will get the Industrial License. ASCC will submit your case and make a representation with you to Licensing Committee. Licensing Committee's decision shall be final and binding.

Large Enterprise Registration - Industrial Entrepreneur Memorandum

Large Enterprises exempted from the provisions of Industrial Licence are required to file Industrial Entrepreneur's Memorandum (IEM).

• Industrial undertakings exempt from industrial license are only required to file an Industrial Entrepreneur's Memoranda (IEM) in Part 'A', in the prescribed format (Form IEM) with Secretariat for Industrial Assistance (SIA), Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry, Government of India, New Delhi.
• The IEM should be submitted along with a crossed DD of Rs.1000/- for upto 10 items proposed to be manufactured. For more than 10 items an additional fee of Rs.250/- for up to 10 additional items needs to be paid.
• On filing the IEM, an acknowledgement containing the SIA registration No. for future reference is issued. This acknowledgement is sent by post and no further approval is required.
• Upon commencement of commercial production, industrial undertakings need to file information in Part-B of the IEM to SIA. No fee is to be paid for filing Part-B.
• All the fees payable to SIA are paid through a crossed demand draft drawn in favour of Pay & Accounts Officer, Dept of Industrial Policy and Promotion, Ministry of Commerce & Industry, payable at New Delhi.
• An IEM would stand cancelled if the proposal requires compulsory license.
• All industrial undertakings whether or not exempt from compulsory industrial licensing, are statutorily required to submit monthly production return in the prescribed performa every month. This should reach the Industrial Statistics Unit (ISU) of the Department positively by the 10th of the following month.

You can download the IEM by clicking PDF icon below.

ASCC Service Offering: ASCC will liaise with Secretariat for Industrial Assistance (SIA) in New Delhi to help you the Industrial Entrepreneur Memorandum Registration (Formerly - LSI Registration).

Carry On Business (COB) License for Micro & Small Enterprise

Small-scale units by virtue of their natural growth may exceed the investment limit prescribed for small-scale units. In such cases these units need to obtain a Carry-on-Business (COB) License based on the best production in the preceding three years. No export obligation is fixed on the capacity for which the COB license is granted.

The application for COB licence should be submitted in revised form 'EE', along with a crossed demand draft of Rs.2500/-.

However, on further expansion of its capacity beyond the capacity included in COB license, the unit would need to obtain an industrial license.

You can download the Form EE by clicking PDF icon below.

ASCC Service Offering: ASCC will liaise with Secretariat for Industrial Assistance (SIA) in New Delhi to help you the Carry On Business (COB) License.

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