Central Govt introduces Vivad Se Vishwas Scheme for Covid Relief to MSMEs: Invites Applications till 30th June

The Central Government has launched the Vivad Se Vishwas Scheme for relief to the Micro, Small, Medium Enterprises (MSMEs) for Covid-19 period as proposed in the Union Budget 2023-24. The last date to submit the claims under the scheme is 30th June 2023.

The Ministry of Finance’s Department of Expenditure began the processes necessary to implement the programme that will assist MSMEs. The department introduced the ‘Vivad se Vishwas I – Relief to MSMEs’ scheme.

The Government of India launched the “Vivad se Vishwas” programme in 2020 to settle unresolved tax disputes between taxpayers and the Income Tax Department. The scheme’s major goals are to resolve tax issues quickly and affordably, prevent litigation, and bring in money for the government.

Nirmala Sitharaman, the central finance minister, included a relief plan for MSMEs in the Union Budget 2023. The minister stated in the budget speech that in cases when MSMEs faile to execute contracts during the COVID term, 95% of the forfeited money due to bid or performance security will be reimbursed to them by the Government and Government undertaking.

On 6th February 2023, the department of expenditure issued an order indicating the broad structure of the scheme. The scheme commenced from 17th April 2023.

The performance security, bid security, and liquidated damages forfeited or deducted due to the COVID epidemic are to be refunded by the ministers as per the scheme. Additionally, MSMEs barred for default in contract execution during the COVID pandemic also received certain reliefs.

Following benefits will be provided through the scheme to MSMEs affected during pandemic:

1. 95% refund of Performance security forfeited
2. 95% refund of Bid security
3. 95% refund of liquidated damages refunded
4. 95% refund of Risk purchase amount realised
5. Debarment revocation of MSMEs due default in execution of contracts in covid period

Additionally, no interest shall be paid on such refunded amount.

The claimants may submit the claims via the webpage of Government e-Marketplace (GeM) website that have been designed for the scheme.The eligible claims will be processed only through GeM.

The following criteria is mandatory for an MSME to receive the relief:

1. MSME shall be registered as per relevant scheme of Ministry of MSME on the date of claim by the contractor/supplier.
2. The original delivery and completion dates specified in the contract should be from February 19, 2020, to March 31, 2022.

The Central Government has taken several initiatives to provide financial assistance and relief to the MSME sector during the COVID-19 pandemic like Emergency Credit Line Guarantee Scheme (ECLGS), Subordinate Debt Scheme:, Atmanirbhar Bharat Abhiyaan, Waiver of late fee, PM SVANidhi Scheme..etc.

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