Find out what our Govt. has planned to help MSMEs survive the COVID-19 fallout!

                                     Micro Small and Medium Enterprises (MSME)

MSMEs are the lifeblood of the Indian economy, and experts across the globe have agreed that they will be instrumental in the recovery of the country’s economic health from the COVID-19 financial crisis. They are also the sector that has been worst affected by the economic downturn of the global pandemic, as they lack the financial cushion required to weather such a violent storm of losses due to the lockdown.

The Ministry of Micro, Small and Medium Enterprises (MSME), Govt. of India, has formulated several new schemes to help Indian MSMEs survive this crisis, and here is a quick summary of those benefits –

1. Priority refund of GST and Income tax upto Rs. 5 lakhs with immediate effect

2. Notification regarding Taxation - GST and TDS relaxations - Relaxations have been made by the Income Tax Department regarding tax compliance timelines extending timelines to 30th June for the filing of belated/revised tax returns for FY 2018-19. Furthermore, any delayed payment of self-assessment tax made between 20 March 2020 to 30 June 2020 would attract reduced interest rate of 9% per annum (p.a.) instead of 12% p.a.

The payment of TDS for the month of March 2020 has also been addressed and delay of payment will attract a reduced rate of interest at 0.75% per month (instead of 1.5%). The filing of TDS returns for the FY 2019-20 has been granted extended timelines to 30th June. The deadline for the Aadhar-PAN linking has been extended from 31st March to 30th June, 2020.

3. Notification about the “Companies Fresh Start Scheme, 2020” - The ministry of corporate affairs has introduced the “Companies Fresh Start Scheme 2020” and revised the “LLP Settlement Scheme,2020” to provide relief to law-abiding companies and LLPs during the COVID-19 crisis. The new amendments will allow companies and LLPs much longer timelines to comply with various requirements under the Companies Act 2013 and the LLP Act, 2008. Further, it allows a one-time waiver of additional filing fees for delayed filings during the period starting of 1st April to 30th September, 2020, offering companies and LLPs an opportunity to make a “fresh start”. If any MSMEs has not filed their ROC annual or other return, they can file the same now without any late fee or penalties. If you need any assistance on the same, or you want to know more about the same, you can reach out to our expert team at CS@tya.co.in.

4. Notification on Amendment in the EPF Scheme - The Ministry of Labour and Employment announced an amendment in the EPF scheme to allow withdrawal of non-refundable advance by EPF members. Field offices have been directed to process all such claims promptly. All members of the EPF scheme are eligible for these benefits, and permitted to withdraw upto the amount of basic wages and dearness allowance for three months, or upto 75% of the amount standing to the member’s credit in the EPF account, whichever is lesser.

5. Delinking ECR Return with Payment (under PF) - This is a significant step. Currently, companies were not allowed to file the PF returns without payment. Non-filling of PF return had severe consequences. The Companies now can file the ECR return without payment and can pay the amount later and also avail the benefit of extended due dates for payments. Further, the due date for March 2020 has been extended to May 15, 2020.

6. EPF Contribution by Government on behalf of Companies - The labour ministry notified the special scheme wherein the government will contribute 24% of the employee and employer provident fund share per month for three months to PF accounts of employees earning less than Rs 15,000 to tide over the impact of Covid-19 on small establishments. Refer to detailed guidelines at https://www.epfindia.gov.in/site_en/covid19.php.

7. Extension of Professional tax Return for April 2020 and annual renewals - Karnataka government has extended the due date for monthly return for March 2020 and now the returns can be filled till May 20, 2020 without any interest or penalty. Similar extension has also been given to annual enrolment renewal which was due on April 30, 2020. The same can be done now by May 30, 2020.

8. Introduction of Covid 19 Start-up Assistance Scheme (CSAS) - This scheme will provide assistance to innovative startups that have demonstrated the ability to adapt to the economic impact of Covid-19 and ensured its employees safety and financial stability. Please check if your startup is eligible for the benefit at http://sidbivcf.in/en/csas

9. Extension of Interest Subvention scheme for MSMEs - Government 2% interest subvention scheme was supposed to end on March 31, 2020, however, Government has decided to extend the same to April 2020 as well.

10. Change on MSME definition - Government is working to update the definition of MSME, to include a much larger base of companies to avail various benefits designed for MSMEs.

11. Launch of SAFE, SAFE- Plus and SMILE Schemes by SIDBI - The special scheme will help MSEs to acquire equipment, plant and machinery and other assets including raw materials required for production or delivery of services. It will also help meet additional emergencies to ramp-up supplies of these essential products. It will be a digital interface and MSEs can apply for the loan through: https://onlineloanappl.sidbi.in/OnlineApplication/login.action

12. Notification about Movement of Essential Goods & Services - The Ministry of Home Affairs has demanded that unhindered movement of essential goods and services is to be ensured nation-wide during the lockdown. This has been conveyed in writing to all states and UTs, who have also been advised to set up 24x7 control rooms to help protect essential service providers from unwarranted stigmatization and harassment.

The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, has also set up a control room for real-time monitoring of the status of transportation and delivery of goods, manufacturing and delivery of essential commodities to the common man and the difficulties being faced by various stakeholders during the lockdown period.

13. Notification by the Ministry of Food Processing Industries on Task Force - Union Food Processing Industries Minister Smt. Harsimrat Kaur Badal assured industry representatives that a dedicated Task Force had been established to resolve all problems being faced by the food processing industry, consisting of all senior officials of the food processing industry as well as Invest India members. This task force will be addressing problems regarding manufacture and movement of food products, including factory shutdowns, permissions to operate warehouses, personnel movement and logistic disruptions.

14. Notification regarding CIRP Regulations - The Ministry of Corporate Affairs said that the IBBI has amended CIRP Regulations to provide relief in corporate insolvency resolution process due to the COVID-19 outbreak. The Insolvency and Bankruptcy Board of India (IBBI) stipulated that the period of lockdown imposed by the central govt. shall not be counted as part of the timeline for any activity that could not be completed in relation to a corporate insolvency resolution process. The amended regulations can be found at www.mca.gov.in and www.ibbi.gov.in.

15. Information portals set up - The GoI has set up special portals for the dissemination of COVID-19 related information, as follows -

· MSME information at http://dcmsme.gov.in/Awareness_corona.html

· News and press portal at https://pib.gov.in/newsite/chronavirus.aspx?docid=667

· Invest India Business Immunity Platform (BIP) portal at https://www.investindia.gov.in/bip?utm_source=popup

· List of Various existing MSME Schemes can be obtained at https://my.msme.gov.in/MyMsme/Scheme.aspx

Armed with these facts, MSMEs and small businesses can take the full aid of the Indian Government to survive the COVID-19 economic fallout, and recover their losses in the times to come once the lockdown ends. Making use of these newly afforded benefits, MSMEs must now re-plan their business strategies, and adapt accordingly. Invest India’s BIP has been specially designed to help this particular effort, and MSMEs must take the full advantage being given to them.

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