13/05/2020
Brief on Announcement of measures announced today on 13.05.2020 under "AtmaNirbhar Bharat" (Part 1 of 3), relevant for businesses, are as follows: -
1. Collateral-free Automatic Loans for Businesses, including MSMEs (Standard MSME) :- Emergency Credit Line to Businesses/MSME from Banks & NBFC up to 20% of entire outstanding as on 29.02.20
Conditions/ Terms -
a. Borrowing upto Rs. 25 crores outstanding & Rs. 100 crores Turnover eligible
b. Loans to have 4 years Tenor with moratorium of 12 months on Principal repayment
c. Interest to be capped
d. 100% credit guarantee on principal & interest on such loans (No Guarantee fee, No fresh collateral)
e. Scheme can be availed till 31.10.2020
2. Subordinate Debt for Stressed MSMEs (incl. NPA) : - Functioning MSMEs which are NPA or are stressed will be eligible. CGTMSE to provide partial Credit Guarantee support to Banks. Loans to be given by banks to promoters which will infuse as equity in Unit.
3. Equity for MSME though Fund of Funds - To infuse equity for MSMEs with growth potential and viability. To encourage MSME to get listed on main board of Stock Exchange
4. Definitions of MSMEs - Distinction between Manufacturer & Service Sector eliminated
a. Micro - Investment < Rs. 1 crores & Turnover < Rs. 5 crores
b. Small - Investment < Rs. 10 crores & Turnover < Rs. 50 crores
c. Medium - Investment < Rs. 20 crores & Turnover < Rs. 100 crores
5. Global Tenders in Government procurement disallowed upto 200 crores for foreign companies
6. E-marketing linkages for MSME's to be introduced as a replacement for trade fairs and exhibitions. Fintech to enhance transactions based lending using data generated by such e-marketplace
7. MSME Receivables from Gov & CPSE to be released in 45 days
8. The EPF Contribution support for businesses having less than 100 workers and more than 90% within limit workers, extended for 3 months till August 2020
9. For all other businesses EPF Contribution (Employer & Employee) reduced to 10% each from 12% each for next 3 months
10. Special Liquidity Scheme for NBFCs - Investments to be made in both primary & secondary market transactions in investment grade debt paper of NBFC/HFC/MFI. Securities fully guaranteed by GoI
11. Partial Credit Scheme for Low Credit Rating NBFC/HFC/MFI - Existing scheme extended to cover Bonds/ Commercial Papers (AA Paper and below unrated papers). First 20% loss borne by GOI
12. Relief to contractors - Extension of 6 months provided by all Central Govt Agencies (Railways, Road Transport, etc.) and to release partial Bank Guarantee for partially completed contracts
13. Extension of Registration & Completion date of Real Estate Projects in RERA by 6+3 months- to treat COVID as Force Majeure event
DIRECT TAXES RELIEF
14. Rates of TDS/TCS of non-salaried payments reduced by 25%. i.e. if professional fee of Rs. 1,00,000/-. Deduct TDS only Rs. 7,500/- instead of Rs. 10,000/- (Effective from 14.05.2020 - 31.03.2021)
15. Pending Refunds to Charitable Trusts, non-corporate businesses and professionals to be released immediately
16. Due Date of ITR for FY 19-20 extended to 30.11.2020 for all and Tax Audit date extended to 31.10.20
17. Assessments barring on 30.09.2020 extended to 31.12.20 & getting barred on 31.03.21 to 30.09.21
18. Period of making payment under Vivaad se Vishwaas scheme without interest extended till 31.12.20
Compiled in Public Interest-
CA Abhiroop Aggarwal
