PART 1

ATMANIRBHAR

BHARAT ABHIYAN

PACKAGE SIMPLIFIED

As pledged by our Hon’ble Prime Minister to spend a total of 20 lakh crore to scale up the

economy and to balance the fallout in economy due corona virus pandemic, various packages

have been announced under Part 1 of Atmanirbhar Bharat Abhiyan (Self-Reliant India

Movement) to cater various sections including cottage industry, MSMEs, labourers, middle

class, industries, among others.

Union Finance Minister Nirmala Sitharaman on 13th May, 2020 in the First Phase has

announced various packages/ benefits to benefit various economic sectors.

The package broadly covers relief and benefits to MSMEs, Employee Provident fund Relief,

cut in TDS rate, extension of various statutory deadlines, ITR filling deadline extension and

many more benefits.

MSME stands for Micro, Small and Medium Enterprises. MSME sector has not only emerged

as a highly vibrant and dynamic sector but also played a very important role in the socio-

economic development of the Country and have contributed significantly in terms of Gross

Domestic Product (GDP), Exports and Employment generation.

In last 5 years Government of India has taken various initiates and measure to for the growth

of MSME Sector in the Country. Following are the initiatives under Atmanirbhar Bharat

Abhiyan for MSMEs.

To make the norms of classification growth oriented and align them to the new tax regime

revolving around GST (Goods & Services Tax), Government under Atmanirbhar Bharat

Abhiyan has decided to revise the definition of micro, small and medium enterprises by

introducing an additional criteria or turnover. Also, in the new definition a distinction

between manufacturing and service sector will be eliminated.

OLD CLASSIFICATION

CLASSIFICATION MANUFACTURING ENTERPRISE SERVICE ENTERPRISE

MICRO upto ₹25 lakh upto ₹10 lakh

SMALL above ₹25 lakh upto ₹5 crore above ₹10 lakh upto ₹2 crore

MEDIUM Above ₹5 crore upto ₹10 crore above ₹2 crore upto ₹5 crore

INTRODUCTION

MSME ANNOUNCEMENTS

REVISED CLASSIFICATION OF MSME

NEW CLASSIFICATION

CLASSIFICATION MANUFACTURING & SERVICE ENTERPRISE

MICRO Investment upto 1 crore and

Turnover upto 5 crore

SMALL Investment upto 10 crore and

Turnover upto 50 crore

MEDIUM Investment upto 20 crore and

Turnover upto 100 crore

Government under Atmanirbhar Bharat Abhiyan, has decided to provide Rs. 3 lakh crores

Collateral-free Automatic Loans for Businesses, including MSMEs (emergency credit line) with

a cap on interest. Also, loan will have 100% credit guarantee, which means that in the event

when MSME unit, which availed collateral- free credit loan, fails to discharge its liabilities to

the lender, the Government will provide 100% credit guarantee cover to Banks and NBFCs on

principal and interest.

WHO IS ELIGIBLE?

India’s micro, small and medium enterprises (MSMEs) having outstanding loan upto Rs 25

crore or those with a turnover less than Rs 100 crore.

TENURE OF LOAN

Loan will have a tenure of 4 years with Moratorium of 12months (payment to lender will start

after 12 months) on Principal repayment.

The loan can be availed upto 31st October, 2020 from eligible banks and NBFCs.

Under Atmanirbhar Bharat Abhiyan Indian Government has announced Rs 20,000 crores

subordinate debt for stressed Ministry of Micro, Small and Medium Enterprises (MSMEs) for

enabling stressed MSMEs to equity issues.

Subordinate debt refers to a debt which has have subordinate status in relationship to the

normal debt. It has a lower priority over other debts in case of liquidation during bankruptcy.

WHO IS ELIGIBLE?

Functioning MSMEs which are either Non-Performing Assets (NPA) or are stressed will be

eligible for equity support

COLLATERAL-FREE AUTOMATIC LOANS FOR BUSINESSES, INCLUDING MSMES

SUBORDINATE DEBT FOR STRESSED MSMES

FINANCIAL ASSISTANCE

1. Provision of Rs.20,000 crore as subordinate debt

2. Support of Rs.4,000 Crore to Credit Guarantee Fund Trust for Micro and Small Enterprises

(CGTMSE) which will in turn provide partial credit guarantee support to banks. Banks will

use this fund to promoters of MSMEs which will be used by promoters to infuse equity in

MSME units.

Under this a fund named “fund of Funds” will be established with a corpus of Rs 10,000 crore

and will provide equity funding for MSMEs. It will help MSMES to expand their size and

capacity and also enclosure them to get listed on main board of Stock Exchanges

WHO IS ELIGIBLE?

MSMEs having growth potential and viability

FINANCIAL ASSISTANCE

Fund structure will help leverage Rs. 50,000 crores of funds at daughter funds level

OEPRATIONS

The fund will be operated through various Mother Fund and few daughter funds.

Due to lack of information, scarcity of resources and unorganized ways of selling / marketing,

MSME sector often faces problems in exploring new markets and retaining existing ones. In

order to promote self-reliant India and support Make in India, Government has disallowed

global tenders upto Rs 200 crores in government procurements.

Necessary amendment in the General Financial Rules will be effected.

1. e-market linkage for MSMEs to be promoted which will in time replace trade fairs and

exhibitions

2. Fintech will be used to enhance transaction-based lending using the

3. MSME receivables from Government and CPSEs to be released in 45 days

EQUITY INFUSION FOR MSMES THROUGH FUND OF FUNDS

GLOBAL TENDERS TO BE DISALLOWED

OTHER INITIATIVES

Out of Total 15 packages/ benefits announced by Finance Minister Nirmala Sitharaman, 3

benefits/ packages are under Direct Tax and 2 benefits/ packages are for taxpayers and

employers. Below are the benefits/ packages under Direct Tax.

➢ Due date of all Income Tax Returns for AY 20-21 extended to 30 Nov, 2020

➢ Tax audit in all cases due date extended to 31 Oct, 2020

EARLIER NOW

TAX AUDIT REPORT 30th September 31st October

ITR 31st October 30th November

➢ Date of Assessment for those getting time barred on 30 Sep, 2020 extended to 31 Dec,

2020

➢ Date of Assessment for those getting time barred on 31 March, 2021 will be extended to

30 Sep, 2021

➢ Payment under “Vivad se Vishwas Scheme” can now be paid till 31 Dec, 2020 without

any additional amount

Rates of Tax Deduction at Source and Tax Collected at Source reduced by 25% for all non -

salaried payments to residents. i.e (Payment for Contract, Professional Fees, Interest,

dividend, commission, brokerage etc) for the period 14.05.2020 to 31.03.2021 (FY 2020-21)

Tentative Rates of TDS are given below for reference:

DIRECT TAX ANNOUNCEMENTS

EXTENSION IN DUE DATES

REDUCTION IN TDS/ TCS RATES

SECTION NATURE OF INCOME RATE OF TDS APPLICABLE FOR THE PERIOD

01-04-2020 TO 13-05-2020

14-05-2020 TO 31-03-2021

193 Interest on securities 10% 7.5%

194 Dividend 10% 7.5%

194A Interest other than interest on securities

10% 7.5%

194C Payment to contractors

- 1% :If deductee is an individual or HUF -2%:In any other case

- .75% :If deductee is an individual or HUF -1.5%:In any other case

194D Insurance commission

-10% :If deductee is domestic company -5%:In any other case

-7.5% :If deductee is domestic company -3.75%:In any other case

194G Commission and other payments on

sale of lottery tickets

5% 3.75%

194H Commission and Brokerage

5% 3.75%

194-I Rent -10%:If Rent pertains to hiring of Building and furniture or fitting -2% :If rent pertains to hiring of plant and machinery

-7.5%:If Rent pertains to hiring of Building and furniture or fitting -1.5% :If rent pertains to hiring of plant and machinery

194J Royalty and fees for Professional or

Technical Services

-2%:If recipient is engaged in business of operation of call centre -2%: If sum payable towards fees for technical services (other than professional services) 10%: In all cases

-1.5%:If recipient is engaged in business of operation of call centre -1.5%: If sum payable towards fees for technical services (other than professional services) 7.5%: In all cases

194M Payment to contractor,

commission agent, professional by

certain Individuals or HUF

5% 3.75%

194N Cash Withdrawal -2%:If Cash withdrawn exceed Rs. 1Crore

1.5%:If Cash withdrawn exceed Rs. 1Crore

All pending refunds to charitable trust non- corporate business & professions including

proprietorship, partnership, LLP and Co- operatives shall be issued immediately

The prevailing circumstances have posed challenges for the Global Economy, the Indian

Economy being one of the worst-hit. There is a huge financial stress in India accordingly,

Individuals, Businesses, Corporates etc. are facing huge difficulties while raising funds from

Banks, PFIs, NBFCs, MFIs etc. which are necessary for their business. Further, the situation is

expected to worsen in the coming days due to the non-availability of antidote for the COVID-

19 pandemic.

A Special Liquidity Scheme (Scheme) of Rs. 30,000 Crore has been announced for

NBFCs/HFCs/MFIs.

As NBFCs/HFCs/MFIs are finding it difficult to raise money in debt markets, they can avail this

scheme, thereby will ensure liquidity in the economy.

Under this scheme investment will be made in both primary and secondary market

transactions in investment grade debt paper of NBFCs/HFCs/MFIs whereby the securities will

be fully guaranteed by GoI.

Meaning of Partial Credit Guarantee Scheme: This scheme was offered by Government of

India (GoI) to Public Sector Banks (PSBs) for purchasing high-rated pooled assets from

financially sound Non-Banking Financial Companies (NBFCs) / Housing Finance Companies

(HFCs).

The GoI taking cognizance of the need of liquidity with NBFCs/ HFCs/ MFIs having low credit

rating have introduced Partial Credit Guarantee Scheme 2.0 (PCGS 2.0) with a view to ensure

liquidity & fund availability for MSMEs & Individuals. Accordingly, the existing PCGS

scheme will be extended to cover borrowings such as primary issuance of Bonds/ Commercial

OTHERS

ANNOUNCEMENTS FOR NBFCs/ HFCs/ MFIs

SPECIAL LIQUIDITY SCHEME

PARTIAL CREDIT GUARANTEE SCHEME

Papers (CPs) of such entities. Further, under the scheme the first 20% of loss will be borne by

the GoI.

Once the scheme is properly implemented, it will ensure liquidity of Rs. 45,000 Crore.

To provide relief to law abiding companies in the wake of COVID 19, various relaxations have

been provided under Companies, Act, 2013. Below are the relaxations provided under

Atmanirbhar Bharat Abhiyan.

➢ Mandatory Board Meetings extended by 60 days till 30 September

Provisions of Companies Act, 2013 Relaxation Remark

According to section 173 of the Companies Act, 2013, every Company shall hold minimum four Board Meetings of its Board of Directors every year in a such a manner that not more than 120 days shall intervene between two consecutive meetings of the Board

Mandatory Board Meetings extended by 60 days till 30 September

Gap between two consecutive Board Meeting may extend to 180 days till 30th September, 2020

➢ Allowing Extra Ordinary General Meetings through Video Conference with e-

voting/simplified voting facility

Provisions of Companies Act, 2013

Relaxation Remark

Provision of Companies Act, 2013 provides that Extra Ordinary General Meeting should be held at registered office of India or any other place in India, and shareholders /proxies are required to attend the meeting physically.

Allowing Extra Ordinary General Meetings through Video Conference with e-voting/simplified voting facility

Relaxation is provided for holding Extra Ordinary General Meeting through video Conferencing mode for passing ordinary and special resolution

RELAXATIONS UNDER COMPANIES ACT, 2013

EXTENSION OF TIME LIMIT FOR HOLDING BOARD MEETING

EXTRA ORDINARY GENERAL MEETINGS THROUGH VIDEO CONFERENCING MODE

Now while opening and getting back to work Businesses continue to face financial stress, to

combat this situation the government has announced various Reliefs Relating to EPF

contributions by employer and employees

Reliefs provided under Atmanirbhar Bharat Abhiyan are:

➢ Government to bear PF payment of 24% for 3 more months for units with upto 100 workers

& with 90% having salary less than 15000 p.m.

This was provided earlier for salary months of March, April and May 2020 now it will be

extended by another 3 months June, July and August 2020.

CONTRIBUTION

➢ Statutory PF contribution of both employer and employee will be reduced to 10% each

from existing 12% each for all establishments covered by EPFO for next 3 months. (except

CPSEs and PSUs).

This scheme will be applicable for workers who are not eligible for 24% EPF support under

PM Garib Kalyan Package and its extension.

EPF ANNOUNCEMENTS

NOW

Government will pay aggregate of

both i.e.

24%

8.33%

12%

Earlier

Employer 12%

------------

NOW

Employee0%

Earlier

Employee 12%

------------

NOW

Employee0%

PF CONTRIBUTION BY GOVERNMENT

REDUCED RATE OF EPF CONTRIBUTION

Many Infrastructure projects are facing uncertainties w.r.t Timely Completion of Projects,

Project financing. As a result of which Government Introduce various economic packages for

real estate projects under RERA

The Ministry of Housing and urban affairs will advise states and union territories and their

regulatory authorities to

➢ Treat COVID 19 as “Force Majeure” under RERA

(Force Majeure means an event or effect that can be neither anticipated nor controlled.

It is Contractual Provision which essentially free both the parties from liability or

obligations)

➢ Extend the registration and completion date Suo- moto by 6 months for all registered

projects expiring on or after 25thMarch,2020 without individual applications.

➢ Regulatory Authorities may extend registration and completion date for further period

of 3 months, if needed

➢ Authorities can issue fresh “Project Registration Certificate” automatically with revised

guidelines

➢ Authorities can extend timelines of various compliances under RERA Concurrently

These measures will de-stress real estate developers and ensure completion of projects so

that homebuyers are able to get delivery of their booked houses with new timelines."

OTHERS

ECONOMIC PACKAGES FOR REAL ESTATE PROJECTS UNDER RERA

EXTENDING FILING GST RETURNS TO END OF JUNE 2020

Rs. 90,000 CR LIQUIDITY INJECTION FOR DISCOMS

RS. 1.70 LAKH CRORE RELIEF PACKAGE UNDER PRADHAN MANTRI GARIB

KALYAN YOJANA FOR THE POOR