Today MEME company enjoys various aids through various schemes. These are the body that provides various benefits to these types of companies.
- Central government schemes for MSME
- RBI schemes
- Ministry of corporate affairs
- Ministry of Finance
- State government schemes
- AatmaNirbhar Bharat Scheme
Out of these, we have created a separate post for Central government schemes and RBI benefits. Let’s discuss the remaining.
MSME Schemes by Ministry of Corporate Affairs
1. REPORTING OF DUES TOWARDS MSME’S
Every company has to file a form with MCA twice a year specifying the dues towards MSME’S. It can be helpful to claim the recovery of the dues towards MSME’S within the stipulated period of 45 days in the MSME Act.
2. FAST TRACK EXIT SCHEME
MCA has brought in a fast track exit scheme for the MSME’S through which the company can be wound up without any hassles.
3. DISCLOSURES IN THE NOTES TO ACCOUNTS IN THE FINANCIALS
Every corporate entity, irrespective of its size, has to disclose its dues towards MSME’S in notes to accounts of its financial statements. It provides an additional probability of recovery of the dues within the stipulated period of 45 days in the MSME act.
MSME Schemes by Ministry of Finance
1. SPECIAL PROVISION IN INSOLVENCY AND BANKRUPTCY
The government has decided to increase the threshold for applications under the Insolvency and Bankruptcy Code (IBC) to 1 crore from 1 lakh which will give some breathing room to the micro, small and medium enterprise (MSME) sector even as the resolution of stressed assets takes a beating.
It also plans to bring a special insolvency resolution framework for small businesses for rapid resolution of the stressed MSME’S.
2. TAX RELATED BENEFITS AND EXEMPTIONS
2.1. Direct Taxation
- Currently, eligible start-ups with a turnover of Rs 25 crores are permitted to deduct 100 per cent of their profits for three continuous seven years if the total turnover doesn’t really exceed Rs 25 crore for 3 straight assessment years. In order to extend this benefit to larger startups, the turnover limit has been proposed to be increased from the existing Rs 25 crore to Rs 100 crores. The period of eligibility for the claim of deduction has been extended from the existing 7 years to 10 years.
- The corporate tax rate for newly started manufacturing companies has decreased to 15 per cent to raise investment. The rate has also been reduced to 22 per cent for existing businesses. This will allow the business to increase their businesses and invest freshly in the long term.
2.2. GST Composition Scheme for MSME’S:
- Reduced rate of GST within the range of 1% to 6% as compared to the usual range of 1% to 28%.
- Simplified GST returns and quarterly payment of GST.
- MSME’S are not required to do the GST reconciliation under this scheme.
MSME Schemes by State Government
- The assistance of capital investment subsidy, interest subsidy to MSEs for manufacturing industries & CGTMSE fees for MSEs
- Assistance for interest subsidy to service enterprise
- Assistance for quality certification
- Assistance for technology acquisition
- Assistance for patent registration
- Assistance for saving in consumption of energy & water
- Assistance to SME for raising capital through SME exchange
- Rehabilitation of sick enterprises
- Assistance to MSME manufacturing sector participation
- Assistance to MSME for participation in trade fairs outside the state of Gujarat (within India) / international trade fair outside India
- Assistance to organizers for organizing industrial exhibitions
- Assistance to a private developer for developing readymade sheds in mini-estate
- Assistance in rent to MSEs
- Schemes for assistance labor-intensive industries
- Scheme for assistance to research & development activities
- Scheme for assistance to environment management projects
- Scheme for assistance in encouraging green practice and environmental audit to MSME
- Scheme for awards to MSME’S
- Scheme for awards to export awards
- Scheme for financial assistance to the plastic industry
- Scheme for assistance to GIDC for the development of MSEs industrial estate
- Assistance to GIDC for developing multi-storeyed sheds in saturated estates for MSEs
- Assistance to startups/innovation
Benefits for MSMEs under ‘Aatmanirbhar Bharat’
₹3 LAKH CRORE EMERGENCY WORKING CAPITAL FACILITY FOR BUSINESSES, INCLUDING MSME’S
- Guarantee-free collateral-free additional funding for borrowers.
- Emergency Credit Line to Businesses/ MSME’S from Banks and NBFCs up to 20% of entire outstanding credit as on 29.2.2020.
- Borrowers with up to Rs. 25 crore outstanding and Rs. 100 crore turnover eligible.
- Loans to have 4-year tenor with a moratorium of 12 months on Principal repayment.
- Interest to be capped at 9.25% for banks and 14% for NBFCs.
- 100% credit guarantee cover to Banks and NBFCs on principal and interest.
- The scheme can be availed till 31st Oct 2020.
₹20,000 CRORE SUBORDINATE DEBT FOR STRESSED MSMEs
- Debt facility to be provided to the promoters of stressed MSMEs up to 15% of the total debt of Rs 75 lacs, whichever is lower.
- The subordinated debt to be infused as equity by the promoters in the MSME.
- It can be applied through scheduled commercial banks.
₹50,000 CRORE EQUITY INFUSION THROUGH MSME FUND OF FUNDS
- SIDBI to float 25 various investments funds wherein the MSME’S can apply for equity funding
NO GLOBAL TENDERS FOR GOVERNMENT TENDERS OF UPTO `200 CRORE
- Global Tenders that had to be routed through various embassies and consulates shall not be required to pass through such embassies and consulates if the total value of the tender is up to Rs 200 crores.
RELEASE OF DUES TOWARDS MSME’S
- Dues towards MSME’S by the Government and CPSEs to be released in 45 days