The Prime Minister had announced the Aatmanirbhar Bharat package that will focus on making India self-reliant during his national address on Tuesday. The Finance Minister, Smt. Nirmala Sitharaman has addressed a press conference on May 13, 2020 to share the details of Rs 20 lakh crore economic package announced by the Prime Minister, Sh. Narendra Modi. The Finance Minister has announced several package for the Micro, Small and Medium Enterprises (MSME) sector to provide them some sort of relief under COVID-19 pandemic. A slew of measures have been announced by the FM which includes collateral free automatic loan, revised definition of MSME, Changes done in EPF & Income Tax provision etc.

Key Takeaways:

1. Collateral free loan of Rs 3 lakh crores for MSMEs. This will benefit 45 lakh units so that they can resume work and save jobs.

2. For stressed MSMEs, Subordinate debt provision of Rs 20,000 cr has been announced for 2 lakh MSMEs. It will benefit those which are NPAs or stressed MSMEs

3. Rs 50,000 crore equity infusion through Mother fund-Daughter fund for MSMEs that are viable but need handholding. A fund of funds with corpus of Rs 10,000 crore will be set up to help these units expand capacity and help them list on Markets if they choose.

4. Definition of MSMEs has been revised to allow MSMEs to aim for expansion and not lose benefits. Also, there’ll be no distinction between manufacturing & services sector MSMEs.

New definition: Micro units with investment till Rs 1 cr, turnover up to Rs 5 crore. Small units with investment till Rs 10 cr, turnover up to Rs 50 cr. Medium units with investment till Rs 20 cr, turnover up to Rs 100 crore.

5. Global tenders will be disallowed up to Rs 200 crore for government contracts.

6. Will ensure e-market linkages are provided across the board in the absence of non-participation in trade fairs due to Covid. Govt of India and PSUs will clear all the receivables in next 45 days.

7. A liquidity relief of ₹2,500 crore EPF support is being given to all EPF establishments, EPF contribution will be paid by Govt. of India for another 3 months till August and will benefit more than 72 lakh employees.

8. Statutory EPF contribution for all organisations and their employees covered by EPFO has been reduced to 10% from 12% earlier. This doesn’t apply to govt organisations. This will infuse Rs 6,750 cr liquidity into these organisations.

9. Rs 30,000 crore special liquidity scheme for investing in investment grade debt paper of NBFCs, HFCs and MFIs. These NBFCs are those that are also funding MSMEs. These will be fully guaranteed by government of India.

10. Rs 45,000 crore partial credit guarantee scheme 2.0 for NBFCs. The first 20% loss will be borne by the guarantor that is government of India.

11. For Discoms, a one-time emergency liquidity injection of Rs 90,000 crores against all their receivables. The states will guarantee it.

12. The rates of TDS/TCS in respect of specified payments/receipts shall be reduced by 25%. This concession in the rate shall be available for the tax deducted or collected between 14-05-2020 till 31-03-2021. This relief shall not be available to a salaried and non-resident taxpayer. The tentative rates of TDS and TCS are specified in the below table.

13. All pending refunds to charitable trust and non-corporate businesses and professions shall be released soon.

14.Due date of all Income-tax return for the Financial Year 2019-20 will be extended from July 31, 2020 and October 31, 2020 to November 30, 2020.

15. The due date for tax audit under section 44AB shall be extended from September 30, 2020 to October 31, 2020

16. The last date for opting Vivad se Vishwas Scheme without paying additional 10% of the disputed tax shall be extended till December 31, 2020

17. Due date of 30-09-2020 for completion of assessments shall be extended to 31-12-2020. Where assessments are getting barred on 31-03-2021, it shall be extended to 30-09- 2021.

18. An extension of up to 6 months (without costs to contractor) to be provided by all Central Government Agencies like Railways, Ministry of Road Transport & Highways, Central Public Works Dept.

19. On real estate, urban development ministry will issue advisory to states/UTs so that the regulators can invoke force majeure. The regulators can suo moto extend completion/registration dates for six months for projects expiring on or after March 25, 2020.

All classes of enterprises, whether Proprietorship, Hindu undivided family, Association of persons, Co-operative society, Partnership firm, Company or Undertaking, by whatever name called can apply for the registration and get qualified for the benefits provided under the Act.

  If a micro or small enterprise files a memorandum with District Industries Centre (DIC) of its               area, then it stands to gain many benefits like:

• Easy finance availability from Banks, without collateral requirement;

• Protection against delay in payment from Buyers and right of interest on delayed payment;

• Preference in procuring Government tenders;

• Stamp Duty and Octroi benefits;

• Concession in electricity bills;

• Reservation policies for manufacturing/production through conciliation and arbitration;

• Reimbursement of ISO Certification Expenses;

• Moreover with the enactment of the Act, the interest on delayed payments to small scale and ancillary Industrial Undertaking Act, 1993 is repealed with effect from October 2, 2006

A. Visit  https://udyogaadhaar.gov.in  for official website of MSME “Udyog Aadhaar Portal”

B. Mobile must be linked with AADHAAR as OTP based authentication

C. No documents to upload

D. No government fees

E. Instant registration certificate once fill all information and click submit.

Disclaimer:

This material and the information contained herein prepared by P R A S S & Associates LLP is intended to provide general information on the subject stated and is not an exhaustive. We are not providing any professional advice or service by means of the above information. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult with us or any other qualified professional adviser.