With the Right Compliances, Aim for IPO – A Wake-Up Call for Manufacturing Companies
In India’s rapidly transforming economy, manufacturing companies are the backbone of Make in India, yet many such enterprises unknowingly push themselves from profit to penalty — not because of lack of business but due to lack of compliance and strategic awareness.
As a leading CA firm for manufacturing companies in Pune, we have observed a common pattern: companies with great products and demand still face financial strain, missed opportunities, and even shutdowns — all due to compliance negligence and short-term thinking.
Let’s break it down.
Profit Margins Vs. GST Burden – The Hidden Killer
Most MSME and mid-sized manufacturing companies operate with net margins of 10–15%, but GST rates on their outputs range from 12% to 28%. What does this mean?
A single non-compliance like:
Not paying RCM (Reverse Charge Mechanism) on unregistered services
Missing self-invoicing obligations
Incorrect treatment of job work under GST
Undeclared scrap sales
…can wipe out your entire month’s profit with a single penalty notice.
And yet, many factory owners are still unaware that self-invoicing for RCM, Form ITC-04 for job work, and scrap sales under correct HSN codes are mandatory requirements.
Missed Subsidies = Missed Millions
What’s even more heartbreaking?
Government subsidies under PSI (Package Scheme of Incentives) — offered by states like Maharashtra — are specifically designed for manufacturers investing in machinery, expansion, and employment.
We’ve seen clients miss out on subsidies ranging from ₹20 lakh to ₹3 crore, simply because:
No one told them to register under DIC
They didn’t submit the UDYAM or IEM Part B
They started production before applying for subsidy
This is free money — not a loan — and it’s slipping through your fingers due to lack of compliance planning.
Section 80JJAA – The Tax Deduction You Probably Ignored
If you’re hiring new workers in your factory, Section 80JJAA of the Income Tax Act gives you an additional 30% deduction of employee cost for 3 years.
It’s simple:
Hire full-time employees (above a threshold)
Pay them through bank
File the right disclosures
Yet most manufacturers don’t even mention this to their tax consultants — and that’s money left on the table.
No SOPs. No Systems. Only Proprietorship Mindset
Many manufacturing businesses still operate like they did 10 years ago:
No written Standard Operating Procedures (SOPs)
No internal audit mechanism
No clarity between personal and business accounts
No visibility into unit economics or customer profitability
And worst of all? No marketing strategy.
They don’t:
Use website SEO, Google Maps, or product catalogs
List on GeM, PSU vendor sites, or industry directories
Leverage platforms like IndiaMart or Export Council listings
In short: excellent products, poor visibility.
It’s not the product that fails. It’s the system that never existed.
What’s the Future? Think IPO. Think Structure.
The next decade is not for proprietorship-style businesses.
It’s for well-compliant, data-driven, growth-ready companies.
If your vision is:
To raise funds from institutions
Get listed in SME exchanges
Sell to corporates or export internationally
Then the first step is getting your compliances, subsidies, and systems in place.
How We Help – K Y M & Associates | Best CA Firm for Manufacturers
At K Y M & Associates, we work with over 100+ manufacturing companies across India.
Our core focus is to help them grow from ₹1 crore to ₹100 crore with full compliance and strategic guidance.
Our Support Includes:
GST Compliance (RCM, Job Work, Scrap Sales, ITC-04)
PSI Subsidy Eligibility & Filing (Maharashtra, Gujarat, etc.)
Income Tax Planning (80JJAA, 35AD, and more)
SOP Designing & Internal Audit Systems
MCA, ROC & Startup India Registrations
IPO Readiness, SME Exchange Consultancy
Don’t Let Non-Compliance Kill a Great Business
You’ve built your factory with sweat and effort.
Let’s make sure it doesn’t fall because of a missed form or a forgotten notification.
With the right compliances, strategic filings, and future-ready mindset, your manufacturing company can do more than survive – it can scale, grow, and even go public.
Book a Consultation Today!
Let us assess your current compliance gaps and prepare a custom roadmap toward:
Tax savings
Subsidy eligibility
Operational efficiency
IPO readiness