Ease of doing business for MSMEs: According to the scheme details, 95 per cent of the performance security, 95 per cent of the bid security, 95 per cent of the liquidated damages (LD), and 95 per cent of the risk purchase amount forfeited or deducted from MSMEs during the Covid period will be refunded.
Ease of doing business for MSMEs: The Department of Expenditure (DoE), under the Ministry of Finance, on Tuesday announced the launch of the Vivad se Vishwas I – Relief for MSMEs scheme. As per the scheme, announced by finance minister Nirmala Sitharaman in this year’s budget, ministries have been asked to refund performance security, bid security and liquidated damages forfeited/ deducted during the Covid pandemic from MSMEs which were unable to execute government contracts due to Covid.
The DoE said it had issued an order on February 6 indicating the broad structure of the scheme while the final instruction in this regard to extend the relief to cover more cases and relax the limits of refunds was issued on April 11. While the official announcement of the scheme’s launch was made today, it had commenced on April 17. The last date for submission of claims is June 30, 2023.
According to the scheme details, 95 per cent of the performance security, 95 per cent of the bid security, 95 per cent of the liquidated damages (LD), and 95 per cent of the risk purchase amount forfeited or deducted from MSMEs during the Covid period will be refunded.
Moreover, in case any firm has been debarred only due to default in the execution of such contracts, such debarment will also be revoked by issuing an appropriate order by the procuring entity, DoE noted. However, “in case a firm has been ignored for placement of any contract due to debarment in the interim period (date of debarment and the date of revocation), no claim shall be entertained.”
Also, no interest will be paid to MSMEs for the amount refunded.
However, MSMEs submitting claims must be a registered unit on the date of filing for claim irrespective of any category of goods and services it is registered for. Also, the original delivery period or completion period stipulated in the contract should be between February 19, 2020 and March 31, 2022.
Importantly, the DoE has already tasked the public procurement portal Government e-Marketplace (GeM) to implement the scheme. According to an office memorandum issued by DoE in February this year, all contractors or suppliers registered as an MSME as on March 31, 2022, will be eligible to register on the GeM portal to submit their claims.
Also read: Budget 2023: 95% of penalty amount on MSMEs for failure to execute contracts during Covid to be returned
MSMEs will have to provide details including contract number, contracting authority, paying authority and the deducted or forfeited amount on the portal pertaining to the contract applicable with the respective procuring entity.
GeM will intimate nodal officers of the procuring entity about the refund claimed and after due diligence, will initiate the refund. The portal will also provide reports to track pending refunds.
