Central Government has recently made changes in MSME definition
Government has provided following encouraging steps for the growth of MSME sectors :
For MSME : Collateral Free Automatic Loan for MSME.
This will benefit those MSME which have Loan up to 25cr and turnover up to 100cr. There will help 40 to 45 Lac Units in India. This loan will be for 4 Years with a Moratorium of 12 Months. Total Loan of 3 Lakh Cr will be provided under this scheme. This loan will be without any collateral security and under CGTSME scheme.
Government shall infuse Rs. 20000Cr as Subordinate Debt for stressed MSME. Approx 2 Lakh SME units will get benefit from this. Governemnt will provide 4000 cr to CGTSME Trust for this.
Government will establish a Fund of Fund of Rs 50000cr and the amount will be infused as equity to standard MSME. This Will help MSME to expand their capacities.
Government has made vital changes in the Definition of MSME. Till now, only Investment Limit defines a SME. The criteria is changed. Now Turnover criteria is also introduced along with investment criteria. Further, the Government has removed different between manufacturing and service SME.
The changes are as under :
Micro Units- Investment limit is increased to 1Cr from the earlier limit of 20Lakh and Turnover can be up to 5Cr.
Small units- Limit is increased to 10 Cr Investment and turnover 50Cr
Medium Enterprise: Limit is increased to 20 Cr Investment and turnover 100Cr
To provide more opportunities to MSME, It is also provided that Tenders up to 200Cr relating to Government procurement will not be Global Tenders any more. This will benefit MSME units,
Government shall also increase E-Market Linkage to all MSME due to less possibility of Trade fares. Moreover, all Central Government outstanding will be cleared within 45 Days by Government to provide relief of MSME units.
Earlier, it was announced that EPF Payment will be paid by Government for the month of Mar, April, and May. The relief has been now extended by another 3 months. 12%+12% will be paid by Government of India.
Government has also reduced Contribution from 12% to 10% for the organization where an employee is more than 100.
NBFC, MFI, HFC
There will be a Special 30000cr Liquidity window. Further, Government will buy debt papers of these institutions even if investment grade. Further, the same will be fully guaranteed by the Government of India.
Rs. 45000cr Liquidity will be provided to NBFC. The first 20% Loss will be borne by Government of India. Further, even unrated papers will get money under this scheme.
The Discom which are not able to pay the power generation companies, 90000cr Special fund created to pay all outstanding of Power Generation Companies. PFC and REC will provide this money
There will be 6 Month extension to all Government contractors of Railways, Roads, other departments. Government agencies will partially release Bank Guarantees to the extent of work completed. This will give a big relief to the sector.
Onwards, COVID 19 can be treated as an act of God. Therefore, using the Force Major Clause, the project registration will be extended by more 6 Month automatically. So, completion dates of all existing projects to be extended automatically by 6 Months by Government authorities.
To provide more liquidity in the market, non-salaried TDS and TCS rates will be reduced by 25% from existing rates. Moreover, this will be effective from tomorrow and shall remain till 31-03-2021.
It is decided that all Pending Refunds will be issued immediately to all even above 5 Lakhs. For Ass. Year 2020-21, the ITR filling date is extended to 30th Nov 2020, and the Tax Audit completion date is also extended to 31st October 2020.