After declaration of economic stimulus package ‘ATMANIRBHAR BHARAT PART 1’ ON 13/05/2020 by finance minister which was largely related to MSME, most of persons are curious about MSME units and it has been one of the most searched words in the web world of Indian sub-continent.
To enlighten the public at large on various relevant rules, regulations, Schemes and comments thereon related to MSME has been compiled hereunder for ease of reference.
Section 7 of the said Act specifies who is qualified for being MSM Enterprises. As per this section any enterprises engaged in the manufacture or production of any goods pertaining to industry specified in the first schedule of Industries Development & regulations Act, 1951 with certain level of investment in Plant & machineries as well also specifies enterprises engaged in the specified service with certain investment in equipment will be treated as MSM enterprise. These units can be further bifurcated either as micro, Small or medium enterprises which is depends upon investment level in Plant & machineries or equipment. Now turnover criteria are also being added as additional bifurcation criteria for micro, small and medium enterprises.
The above definition section contains various important words like enterprises, Micro, Small and Medium Enterprises, Manufacture, Production, First schedule of IDR Act etc. Let us know the meaning of these important words or reference for the purpose of MSMED Act.
Enterprises: Enterprises means any industrial undertaking, Business concern or other establishment of whatever name called which is engaged in the manufacturing or producing of any goods pertaining to industry specified in 1st schedule of IDR Act or providing any service. It means that enterprises may be of any constitution be it proprietorship, partnership, LLP or company etc.
MICRO, SMALL and MEDIUM ENTERPRISES: Earlier bifurcation of units was based on the investment in plant & machineries or equipment but as per announcement of Finance Minister in Economic package and notification dated 01/06/2020 , an additional criterion on the basis of turnover is also being added as bifurcation point. A tabular Chart of Earlier and New criteria is as under:
Earlier Criteria for Bifurcation
|Nature of Industry||Type of Industry||Original Investment Value in Plant & machinery or Equipment’s (for service sector)|
|Manufacturing Sector||Micro||Up to 25 Lcas|
|Small||From 25 Lac to 500 La|
|Medium||From 500 lacs to 1000 Lacs|
|Service Sector||Micro||Up to 10 Lacs|
|Small||From 10 lac to 200 Lac|
|Medium||From 200 Lac to 500 lac|
New Criteria for Bifurcation (Wef 01/07/2020)
|Nature of Industry||Type of Industry||Original Investment Value in Plant & machinery or Turnover|
|Manufacturing or Service Sector||Micro||Investment Less than 1 Crore
Turnover Less than 5 Crore
|Small||Investment Less than 10 Crore
Turnover Less than 50 Crore
|Medium||Investment Less than 50 Crore
Turnover Less than 250 Crore
MSMED Act has been modified w.e.f. 01/07/2020 accordingly manufacturing and service sector has been merged together and no separate bifurcation is needed now.
It is pertinent to note here that other notification issued shall be operative as such and while calculation of value of plant & machineries certain items have to be excluded as per notification no 1722€ dated 06/10/2006.
While calculation of original value of plant & machineries certain equipment like tools, Jigs, dies etc have to be excluded. Installation cost, Power generation set, Bank charges, Gas Producer Plants, Charges paid to technical knowhow, Storage tanks, Firefighting Equipment is also required to be excluded while calculation of original cost of plant & machineries but in case of imported machineries exp incurred on import like import duty, shipping charges, custom clearance charges etc has to be added back.
Since word AND is added between both the conditions hence both the condition is cumulative accordingly bifurcation will be made. We can understand this situation from undermentioned chart:
|S No||Position of Investment and turnover||Classification||Remarks|
|1||Investment in PM is 50 Lacs but turnover is 40 Crore||Small||As the wording of classification ends with word does not exceed which means “up to” and up to includes limit of previous criteria also. Say investment does not exceed 50 cr includes investment from Rs 1 to 50 cr. Like that and so on.|
|2||Investment in PM 51 Cr and turnover is 100 Crore||NO MSME|
|3||Investment in PM 9 crore and turnover is 60 Crore||Medium|
Though press release had clarified that turnover shall not include export turnover but no such exclusion has been found in the notification issued on 01/06/2020.
First Schedule of IDR Act: There are 38 type of industries in the first schedule to the IDR Act, 1951. It means MSME can produce any goods of these 38 industries. List of such industries are as under:
1. METALLURGICAL INDUSTRIES:
A. Ferrous: (1) Iron and steel (Metal). (2) Ferro-alloys. (3) Iron and Steel castings and forgings. (4)ron and Steel structurals. (5) Iron and Steel pipes. (6) Special steels (7) Other products of iron and steel. B. Non-ferrous: 2 [(1) Precious metals, including gold and silver, and their alloys;
(1A) Other non-ferrous metals and their alloys.] (2) Semi-manufactures and manufactures.
2. FUELS: (1) Coal, lignite, coke and their derivatives. (2) Mineral oil (crude oil), motor and aviation spirit, diesel oil, kerosene oil, fuel oil, diverse hydrocarbon oils and their blends including synthetic fuels, lubricating oils and the like. (3) Fuel gases—(coal gas, natural gas and the like).
3. BOILERS AND STEAM GENERATING PLANTS: Boilers and steam generating plants.
4. PRIME MOVERS (OTHER THAN ELECTRICAL GENERATORS): (1) Steam engines and turbines. (2) Internal combustion engines.
5. ELECTRICAL EQUIPMENT: (1) Equipment for generation, transmission and distribution of electricity including transformers. (2) Electrical motors. (3) Electrical fans. (4) Electrical lamps. (5) Electrical furnaces. (6) Electrical cables and wires. (7) X-ray equipment. (8) Electronic equipment. (9) Household appliances such as electric irons, heaters and the like. (10) Storage batteries. (11) Dry cells.
6. TELECOMMUNICATIONS: (1) Telephones. (2) Telegraph equipment. (3) Wireless communication apparatus. (4) Radio receivers, including amplifying and public address equipment. (5) Television sets. (6) Teleprinters.
7. TRANSPORTATION: (1) Aircraft. (2) Ships and other vessels drawn by power. (3) Railway locomotives. (4) Railway rolling stock. (5) Automobiles (motor cars, buses, trucks, motor cycles, scooters and the like). (6) Bicycles. (7) Others, such as fork lift trucks and the like.
8. INDUSTRIAL MACHINERY: A. Major items of specialised equipment used in specific industries:— (1) Textile machinery (such as spinning frames, carding machines, powerlooms and the like) including textile accessories. (2) Jute machinery. (3) Rayon machinery. (4) Sugar machinery. (5) Tea machinery. (6) Mining machinery. (7) Metallurgical machinery. (8) Cement machinery. (9) Chemical machinery. (10) Pharmaceuticals machinery. (11) Paper machinery. B. General items of machinery used in several industries, such as the equipment required for various ‘unit processes’: (1) Size reduction equipment—crushers, ball mills and the like. (2) Conveying equipment—bucket elevators, skip hoist, cranes, derricks and the like. (3) Size separation units—screens, classifiers and the like. 32 (4) Mixers and reactors—kneading mills, turbo mixers and the like. (5) Filtration equipment—filter presses, rotary filters and the like. (6) Centrifugal machines. (7) Evaporators. (8) Distillation equipment. (9) Crystallisers. (10) Driers. (11) Power driven pumps—reciprocating, centrifugal and the like. (12) Air and gas compressors and vacuum pipes (excluding electrical furnaces). (13) Refrigeration plants for industrial use. (14) Fire-fighting equipment and appliances including fire engines. C. Other items of Industrial Machinery: (1) Ball, roller and tapered bearings. (2) Speed reduction units. (3) Grinding wheels and abrasives.
9. MACHINE TOOLS: Machine Tools.
10. AGRICULTURAL MACHINERY: (1) Tractors, harvesters and the like. (2) Agricultural implements.
11. EARTH-MOVING MACHINERY: Bulldozers, dumpers, scrapers, loaders, shovels, drag lines, bucket wheel excavators, road rollers and the like.
12. MISCELLANEOUS MECHANICAL AND ENGINEERING INDUSTRIES: (1) Plastic moulded goods. (2) Hand tools, small tools and the like. (3) Razor blades. 1 [(4) Pressure Cookers. (5) Cutlery. (6) Steel furniture.]
13. COMMERCIAL, OFFICE AND HOUSEHOLD EQUIPMENT: (1) Typewriters. (2) Calculating machines. (3) Air conditioners and refrigerators. (4) Vacuum cleaners. (5) Sewing and knitting machines. (6) Hurricane lanterns.
14. MEDICAL AND SURGICAL APPLIANCES: Surgical instruments—sterilisers, incubators and the like.
15. INDUSTRIAL INSTRUMENTS: (1) Water meters, steam meters, electricity meters and the like. (2) Indicating, recording and regulating devices for pressure, temperature, rate of flow, weights, levels and the like. (3) Weighing machines.
16. SCIENTIFIC INSTRUMENTS: Scientific instruments.
17. MATHEMATICAL, SURVEYING AND DRAWING INSTRUMENTS: Mathematical, surveying and drawing instruments.
18. FERTILISERS: (1) Inorganic fertilisers. (2) Organic fertilisers. (3) Mixed fertilisers.
19. CHEMICALS (OTHER THAN FERTILISERS): (1) Inorganic heavy chemicals. (2) Organic heavy chemicals. (3) Fine chemicals including photographic chemicals. (4) Synthetic resins and plastics. (5) Paints, varnishes and enamels. (6) Synthetic rubbers. (7) Man-made fibers including regenerated cellulose-rayon, nylon and the like. (8) Coke oven by-products. (9) Coal tar distillation products like naphthalene, anthracene and the like. (10) Explosives including gunpowder and safety fuses. (11) Insecticides, fungicides, weedicides and the like. (12) Textile auxiliaries. (13) Sizing materials including starch. (14) Miscellaneous chemicals.
20. PHOTOGRAPHIC RAW FILM AND PAPER: (1) Cinema film. (2) Photographic amateur film. (3) Photographic printing paper.
21. DYE-STUFFS: Dye-stuffs.
22. DRUGS AND PHARMACEUTICALS: Drugs and Pharmaceuticals.
23. TEXTILES (INCLUDING THOSE DYED, PRINTED OR OTHERWISE PROCESSED): (1) Made wholly or in part of cotton, including cotton yarn, hosiery and rope, (2) Made wholly or in part of jute, including jute twine and rope. (3) Made wholly or in part of wool, including wool tops, woollen yarn, hosiery, carpets and druggets; (4) Made wholly or in part of silk, including silk yarn and hosiery; (5) Made wholly or in part of synthetic, artificial (man-made) fibers, including yarn and hosiery of such fibers.
24. PAPER AND PULP INCLUDING PAPER PRODUCTS: (1) Paper—writing, printing and wrapping. (2) Newsprint. (3) Paper board and straw board. (4) Paper for packaging (corrugated paper, Kraft paper), bags, paper containers and the like. (5) Pulp—wood pulp, mechanical, chemical, including dissolving pulp.
25. SUGAR: Sugar.
26. FERMENTATION INDUSTRIES (OTHER THAN POTABLE ALCOHOL):] (1) Alcohol. (2) Other products of fermentation industries
27. FOOD PROCESSING INDUSTRIES: (1) Canned fruits and fruit products. (2) Milk foods. (3) Malted foods. (4) Flour. (5) Other processed foods.
28. VEGETABLE OILS AND VANASPATI: (1) Vegetable oils, including solvent extracted oils. (2) Vanaspati.
29. SOAPS, COSMETICS AND TOILET PREPARATIONS: (1) Soaps. (2) Glycerine. (3) Cosmetics. (4) Perfumery (5) Toilet preparations.
30. RUBBER GOODS: (1) Tyres and tubes. (2) Surgical and medicinal products including prophylactics. (3) Footwear. (4) Other rubber goods.
31. LEATHER, LEATHER GOODS AND PICKERS: Leather, leather goods and pickers.
32. GLUE AND GELATIN: Glue and gelatin.
33. GLASS: (1) Hollow ware. (2) Sheet and plate glass. (3) Optical glass. (4) Glass wool. (5) Laboratory ware. (6) Miscellaneous ware.
34. CERAMICS: (1) Fire bricks. (2) Refractories. (3) Furnace lining bricks—acidic, basic and neutral. (4) China ware and pottery. (5) Sanitary ware. (6) Insulators. (7) Tiles. 1 [8) Graphite Crucibles.]
35. CEMENT AND GYPSUM PRODUCTS: (1) Portland cement. (2) Asbestos cement. (3) Insulating boards. (4) Gypsum boards, wall boards and the like.
36. TIMBER PRODUCTS: (1) Plywood. (2) Hardboard, including fiber-board, chip-board and the like. (3) Matches. (4) Miscellaneous (furniture components, bobbins, shutters and the like).
37. DEFENCE INDUSTRIES: Arms and ammunition.
38. MISCELLANEOUS INDUSTRIES: 2 [(1)] Cigarettes. 3 [(2) Linoleum, whether felt based or jute based. (3) Zip fasteners (metallic and non-metallic). (4) Oil Stoves. (5) Printing, including litho printing industry.]
Other than above manufacturing units, enterprises engaged in the service sector can also registered themselves as MSME.
Manufacture or Production: The most important word is manufacturing or production. Though both the words have not been defined under the Act. As per general clauses Act if specific definition is not given in the Act than definition given in the other Act can be borrowed for interpretation of statute. Definition of Manufacturing is given in the Income Tax Act but production is also not defined under any other Act but we can derive meaning of production from various decided case laws.
Manufacture: Section 2(29BA) of the Income Tax act defines the word Manufacture, which is as under:
“Manufacture”, with its grammatical variations, means a change in a non-living physical object or article or thing,—
(a) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or
(b) bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure;
Production: Apex court of the land in a series of judgements has held that the word ‘production’ has a wider connotation in comparison to ‘manufacture’ and held that any activity which brings a commercially new product into existence constitute production.
Reliance can be placed on CIT v/s HPCL (Civil Appeal no 9295 of 2017) and Arihant Tiles and Marbles P Ltd (2010)320 ITR 79 delivered by Supreme Court of India on this point.
From the above, one can say that any product which is commercially new product and marketable as such is production though it might not qualify for manufacture. For example, mixing of pan masala with tobacco is not qualified as manufacture but certainly it is commercially new product hence can be classified as production.
In a series of judgements, It has been decided by various courts that the said manufacturing or production can be self-manufacturing or through job work.
The Hon’ble Allahabad High Court in the case of Talwar Khuller (P.) Ltd.  235 ITR 70 (All) has held that the assessee company was manufacturing various articles of brassware from artisans under its supervision and control. It was also noted that the assessee gave the pattern and design of the articles to be manufactured by the artisans and advanced money to them for purchasing the raw material. It was also noted that the artisans made articles in different models. It further noted that the articles in raw form were examined by the assessee and then directions were given to the artisans to modify and polish the same. Under these facts, it was held by Hon’ble Allahabad High Court that the assessee company was a new company manufacturing company engaged in manufacturing and processing of article.
Likewise, The Hon’ble Bombay High Court in the case of Penwalt India Ltd. 196 CTR 813 has held that the assessee is getting machinery manufactured by somebody else under its direct supervision and control and all other activities are undertaken by the assessee, the assessee is said to be engaged in manufacture of sugar and tea machinery and therefore, entitled to special deduction u/s 80I of the Act.
In the case of Bidi manufacturing industry, The Hon’ble Gujarat High Court in the case of CIT v. Prabhudas Kishordas Tobacco Products P. Ltd. (2006) 282 ITR 568 (Guj), has held that the tendu leaves and tobacco, which are used as inputs, do no retain their independent identity after the bidis are rolled after undergoing several process. Commercially, the final product is known in the trade as a distinct commodity and has a separate market. Furthermore, merely because an assessee gets the work done through contract workers, in other words, enters into a contract with the workers and pays them per piece the relief could not be denied. The test is whether the outside agency works directly under the supervision and control of the assessee, it being immaterial whether the processing is done by the workers employed by the assessee at a place outside the premises of the assessee.
From the above decisions, It can be concluded that if job work is being done under direct control and supervision of the principal than also principal can claim as benefit of manufacture or production and can be registered as MSM enterprises under the Act.
2. Obligation of MSME Units: Section 8(1) of the Act cast responsibility on MSME units to file memorandum with the notified Authorities. It is pertinent to note here that section has made distinction among various enterprises as under:
|Micro and small Enterprises Engaged in the manufacturing or service||Not Compulsory to file memorandum. It is Voluntary|
|Medium Enterprises engaged in the service||Do|
|Medium Enterprises engaged in the manufacturing||Compulsory to file memorandum with notified Authority within 180 days.|
If any person contravenes the above provision than penalty of Rs 1,000/- can be levied at first time. This penalty can be increased upto Rs 10,000/- on subsequent contravention.
Notified Authority for this purpose is “DISTRICT INDUSTRIES CENTER” and memorandum is popularly known as “UDYOG AADHAR”.
3. Procedure for filing of Memorandum: Memorandum which is popularly known as Udyog Aadhar can be filed online. Guidelines for filing of Udyog aadhar as per government MSME site is as under:
1. Aadhaar Number– 12 digit Aadhaar number issued to the applicant should be filled in the appropriate field.
2. Name of Owner– The applicant should fill his/her name strictly as mentioned on the Aadhaar Card issued by UIDAI.
To Validate Aadhar:-
1. Validate Aadhar– The applicant must click on Validate Aadhaar button for verification of Aadhaar, after that only user can fill the form further.
2. Reset– The applicant can click on reset button to clear the field of Aadhaar No and Name of the owner for different Aadhaar.
OTP will be sent to your mobile number registred with UIDAI. If your mobile number is not registered with UIDAI, please follow instructions given on Pop up window.
3. Social Category– The Applicant may select the Social Category (General, Scheduled Caste, Scheduled Tribe or Other Backward Castes (OBC). The proof of belonging to SC, ST or OBC may be asked by appropriate authority, if and when required.
4. Gender– The Applicant can select gender of Entrepreneur
5. Physically Handicapped– The Applicant can select Physically Handicapped status of Entrepreneur
6. Name of Enterprise– The Applicant must fill the name by which his/her Enterprise is known to the customers/public and is a legal entity to conduct business. One applicant can have more than one enterprises doing business and each one can be registered for a separate Udyog Aadhaar and with the same Aadhaar Number as Enterprise 1 and Enterprise 2 etc.
Combination of same Aadhaar Number and Enterprise Name can be aadded second times. Only additinal details can be added or deleted at the time of editing
7. Type of Organization– The Applicant may select from the given list the appropriate type of the organisation for his/her enterprise. The Applicant must ensure that he/she is authorised by the legal entity (i.e. enterprise being registered for Udyog Aadhaar) to fill this online form. Only one Udyog Aadhaar number shall be issued for each enterprise.
8. PAN Number – The Applicant have to enter PAN Number in case of Co Operative,Private Limited, Public Limited and Limited Liability Partnership It. Will be optinal in remaining type of Organisation
9. Location of Plant– The Applicant may add multiple plant location in one registration by clicking Add Plant button.
10. Official Address– The Applicant should fill in the appropriate field the complete postal address of the Enterprise including State, District, Pin code, Mobile No and Email.
11. Date of Commencement– The date in the past on which the business entity commenced its operations may be filled in the appropriate field.
12. Previous Registration Details(if any)– If the Applicant’s enterprise, for which the Udyog Aadhaar is being applied, is already issued a valid EM-I/II by the concerned GM (DIC) as per the MSMED Act 2006 or the SSI registration prevailing prior to the said Act, such number may be mentioned in the appropriate place.
13. Bank Details– The Applicant must provide his/her bank account number used for running the Enterprise in the appropriate place. The Applicant must also provide the IFS Code of the bank’s branch where his/her mentioned account exists. The IFS code is now a days printed on the Cheque Books issued by the bank. Alternatively, if the Applicant knows the name of the Bank and the branch where his/her account is there, the IFSC code can be found from website of the respective Bank.
14. Major Activity– The major activity i.e. either “Manufacturing” or “Service” may be chosen by the enterprise for Udyog Aadhaar. If your enterprise involves in both type of activities and if major work involves in Manufacturing and small portion of activity involves in Service sector then select your major activity type as “Manufacturing” and if major work involves in Services and small portion of activity involves in Manufacturing then select your major activity type as “Services”
15. National Industry Classification Code(NIC Code)– The Applicant may choose multiple National Industrial Classification-2008 (NIC) Codes to includes all their activities. Which means user can select multiple NIC code of Manufacturing and Service sector by clicking “Add More” button.If you want to add Manufacturing then select “Manufacturing” radiobutton and keep on adding by clicking “Add More” button otherwise if you want to add Service then select “Services” radiobutton and keep on adding by clicking “Add More” button. The NIC codes are prepared by the Central Statistical Organisation (CSO) under the Ministry of Statistics and Program implementation, Government of India.
The Applicant may use National Industrial Classification-2008 (NIC) Codes searching facility to avoid 3 steps selection process.
Example: User has to write matching key word (2 or more characters) in Search text box in Column No 11 . Then all related NIC CODEs will be listed (including Nic 2 Digit, Nic 4 Digit & Nic 5 Digit) with code and description. If User selects NIC 5 Digit code, then automatically all the related fields(like NIC 2 Digit, 4 Digit, 5 Digit & Enterprise Type) at column 11 will be automatically filled. Same way, If user selects NIC 4 digit, then related field of 2 digit NIC Code will filled, but user has to select NIC 5 digit from drop down(In this case 2 steps are required).
16. Person employed– The total number of people who are directly been paid salary/ wages by the enterprise may be mentioned in the appropriate field.
17. lnvestment in Plant & Machinery / Equipment– While computing the total investment , the original investment ( purchase value of items) is to be taken into account excluding tho cost of pollution control, research and development, industrial safety devices, and such other items as may be specified, by notification of RBI. If an enterprise started with a set of plant and machinery purchased in 2008 worth Rs. 70.00 lakh has procured additional plant and machinery in the year 2013 worth Rs. 65.00 lakh, then the total investment in Plant & Machinery may be treated as Rs. 135.00 lakh.
18. DIC– The Applicant, based on the location of the Enterprise, has to fill in location of DIC. This Column will be active and show option only when there are more than one DIC in the district. In fact if there is only one DIC in the district system will automatically register you in the same DIC.
19. Submit– The Applicant must click on Submit button to generate OTP which will be sent to email id mentioned for registration.
20. The Applicant have to enter OTP received on mobile (linked with Aadhaar) second time.
21. Enter Captcha- The Applicant must enter Captcha before clicking Final Submit button.
4. Benefits to MSM Enterprises: MSME units have various benefits under the Act. Section 9 to 13 of MSMED Act specifies various types of schemes which central or state government can launch for the benefit of MSME units. These are as under:
The Central Govt may launch various programmes for skill development, Technology development or marketing assistance by way notification as per guidelines or instructions as it may deem fit (Sec 9)
Policies and practices in respect of credit shall be progressive and as may be specified in the instructions or guidelines or instructions by RBI. (Sec 10)
CG/ SG may notify procurement preference policies (Sec 11)
There shall be constitution of funds and grants will be credited to it (Sec 12)
CG may credit funds by way of grants (Sec 13)
5. Delayed Payment to MSME: Every person who is buying goods or services from MSME units has to make payment to MSME units on or before due date. If no due date is mention or due date is beyond 45 days from purchase date than deemed due date shall be maximum 45 days from the date of purchases. If payment is made after 45 days than buyer has to make payment compulsorily with interest. Rate of interest shall be THREE time of the bank rate of SBI.
In case of dispute between parties any party may refer the dispute to Micro and Small Enterprises Facilitation Council, Council shall either itself conduct conciliation or seek assistance of any institution Sec 65-81 of Arbitration and Conciliation Act, 1996 shall apply, if conciliation not successful then reference to institution providing alternate dispute resolution system and such reference shall be decided within 90 days.
Application for setting aside decree, award or order can be made to a Court by the buyer after depositing 75% of the amount in terms of the decree in the manner directed by the Court.
It is pertinent to note here that this benefit is available only to micro and small enterprises and not medium enterprises and as the definition of buyer and seller in the Act does not contains the word medium enterprises.
6. Obligation for presentation in Annual Accounts of buyer: Any person who buys goods or services from the MSME and require to get its accounts audited under any law shall furnish the following additional information in its annual accounts:-
1. The Principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier at the end of each accounting year;
2. The amount of interest paid by the buyer in terms of Section 16, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year;
3. The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act;
4. The amount of interest accrued and remaining unpaid at the end of each accounting year; and
5. The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise.
7. Status of allowance of interest Exp under Income Tax: As per section 23 of the MSMED Act, Any interest paid or payable under the Act shall not be allowable as admissible expenses under the Income Tax Act.
8. Various schemes for MSME and their link: Government had launched various schemes for development of MSME. A few such schemes are as under:
|Sl. No.||Scheme Name|
|1.||Prime Minister Employment Generation Programme and Other Credit Support Schemes|
|1.1.||Prime Minister Employment Generation Programme(PMEGP)|
|1.2.||Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)|
|1.3.||Interest Subsidy Eligibility Certificate (ISEC)|
|2.||Development of Khadi, Village and Coir Industries|
|2.1.||Science and Technology Scheme|
|2.2.||Market Promotion & Development Scheme (MPDA)|
|2.3.||Revamped Scheme Of Fund for Regeneration Of Traditional Industries (SFURTI)|
|2.4.||Coir Vikas Yojana (CVY)|
|2.4.1.||Coir Industry Technology Upgradation Scheme (CITUS)|
|2.4.2.||Science and Technology (S&T) for Coir|
|2.4.3.||Skill Upgradation & Mahila Coir Yojana (MCY)|
|2.4.4.||Export Market Promotion (EMP)|
|2.4.5.||Domestic Market Promotion Scheme (DMP)|
|2.4.6.||Trade and Industry Related Functional Support Services (TIRFSS)|
|2.4.7.||Welfare Measures (Pradhan Mantri Suraksha Bima Yojana (PMSBY))|
|3.||Technology Upgradation and Quality Certification|
|3.1.||Financial Support to MSMEs in ZED Certification Scheme|
|3.2.||A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)|
|3.3.||National Manufacturing Competitiveness Programme (NMCP)|
|3.3.1.||Credit Linked Capital Subsidy for Technology Upgradation|
|3.3.3.||Marketing Support/Assistance to MSMEs (Bar Code)|
|3.3.4.||Lean Manufacturing Competitiveness for MSMEs|
|3.3.5.||Design Clinic for Design Expertise to MSMEs|
|3.3.6.||Technology and Quality Upgradation Support to MSMEs|
|3.3.7.||Entrepreneurial and Managerial Development of SMEs through Incubators|
|3.3.8.||Enabling Manufacturing Sector to be Competitive through QMS&QTT|
|3.3.9.||Building Awareness on Intellectual Property Rights (IPR)|
|4.||Marketing Promotion Schemes|
|4.2.||Marketing Assistance Scheme|
|4.3.||Procurement and Marketing Support Scheme (P&MS)|
|5.||Entrepreneurship and skill Development Programme|
|5.1.||Entrepreneurship Skill Development Programme (ESDP)|
|5.2.||Assistance to Training Institutions (ATI)|
|6.||Infrastructure Development Programme|
|6.1.||Micro & Small Enterprises Cluster Development (MSE-CDP)|
|7.||Scheme of Surveys, Studies and Policy Research|
|7.1.||Revised guidelines (bilingual) of scheme SS&PR with effect from 15-10-2018. (Download English) & (Download Hindi)|
|8.1.||National SC-ST-HUB (Download English) & (Download Hindi)|
|9.||Scheme of Information, Education and Communication|
|9.1.||Scheme of IEC Guideline(Download English)|
9. Various Schemes under Stimulus Package Atamanirbhar Bharat for MSME: The Central Govt had announced various schemes for MSME in their stimulus package “ATMANIRBHAR BHARAT PART 1” on 13/05/2020. An overview of these schemes are as under:
1. Rs 3 lakh crore collateral-free loans: Banks and NBFCs will offer up to 20 per cent of entire outstanding credit as on February 29, 2020, to MSMEs. Units with upto Rs 25 crore outstanding credit and Rs 100 crore turnover are eligible for taking these loans that will have four-year tenor with a moratorium of 12 months on principal payment. The scheme can be availed till October 31, 2020. The government will provide complete credit guarantee cover to lenders on principal and interest amount.
2. Rs 20,000 crore subordinate debt: MSMEs declared NPAs or those stressed will be eligible for equity support as the government will facilitate the provision of Rs 20,000 crore as subordinate debt. The government will also provide Rs 4,000 crore to CGTMSE that will offer partial credit guarantee support to banks for lending to MSMEs.
3. Rs 50,000 crore equity infusion: The government will infuse Rs 50,000 in equity in MSMEs through a Fund of Funds that will be operated through a Mother fund and a few daughter fund. The Fund of Funds will be set-up with a corpus of Rs 10,000 crore to give equity-based funding to MSMEs having growth potential and viability. It will also urge MSMEs to list on stock exchanges.
4. Global tenders disallowed: No global tender shall be invited up to purchases of Rs 200 crore by the central Government.
From the above discussion, It is very much clear that MSME units have various benefits which is henceforth not available to other big units but one has to get registered themselves as MSME and obtained Udyog Aadhar. Samadhan and champion Portal Launched by the ministry is a good initiative to settle the dispute with MSME units.
(Republished with amendments)