Focus: GS III: Indian Economy
Why in News?
The Department of Expenditure, Ministry of Finance, has launched the scheme, “Vivad se Vishwas I – Relief to MSMEs” for providing relief to Micro, Small and Medium Enterprises (MSMEs) for COVID-19 period.
Vivad se Vishwas I – Relief Measures for MSMEs
- The Vivad se Vishwas I scheme was announced in the Union Budget 2023-24, and is modeled after the Sabka Vishwas Scheme for indirect taxes announced in 2019.
- The scheme provides for settlement of disputed taxes, interest, penalties, etc., and grants immunity from prosecution for any offence under the Income-tax Act, in respect of matters covered in the declaration.
- The scheme also provides relief measures for MSMEs affected during the COVID-19 pandemic.
Refunds and Relief Measures:
- Under this scheme, Ministries have been directed to refund performance security, bid security, and liquidated damages forfeited or deducted during the COVID-19 pandemic.
- In addition, certain relief has been provided to MSMEs that were debarred for default in executing contracts during the COVID-19 period.
- The Ministry of Finance has decided to provide the following additional benefits to eligible MSMEs:
- 95% of the performance security forfeited will be refunded.
- 95% of the bid security will be refunded.
- 95% of the liquidated damages deducted will be refunded.
- 95% of the risk purchase amount realized will be refunded.
- If any firm has been debarred only due to default in executing such contracts, the debarment will be revoked by issuing an appropriate order by the procuring entity.
Exceptions and Conditions:
- However, if a firm has been ignored for placement of any contract due to debarment in the interim period (i.e., date of debarment and the date of revocation under this order), no claim will be entertained.
- No interest shall be paid on the refunded amount.