Vivad se Vishwas scheme: June 30 deadline for MSMEs to submit claims

COVID-19 pandemic, one of the biggest crises in human history, has had a devastating impact on the economy, especially MSMEs.

The Vivad se Vishwas scheme for MSMEs launched by the Finance Ministry, which commenced on April 17, has a June 30 deadline for accepting claim submissions, the government said.

The scheme will be applicable to registered MSMEs on the date of the claim by the supplier/contractor. MSME could be registered for any category of goods and services. The original delivery period/completion period stipulated in the contract was between February 19, 2020 and March 31, 2022.

The Department of Expenditure, Ministry of Finance launched the scheme, “Vivad se Vishwas I – Relief to MSMEs” for providing relief to Micro, Small and Medium Enterprises (MSMEs) during the Covid-19 period.

“In cases of failure by MSMEs to execute contracts during the Covid period, 95 per cent of the forfeited amount relating to bid or performance security will be returned to them by the government. This will provide relief to MSMEs,” Finance Minister Nirmala Sitharaman had said. The ministry has already issued the broad structure of the scheme and instructions in this regard, extending the relief to cover more cases and relaxing the limits of refunds.

“Covid-19 pandemic, one of the biggest crises in human history, had a devastating impact on the economy, especially MSMEs. The relief provided under this scheme is in continuation to the efforts of the government in promoting and sustaining the MSME sector,” Finance Ministry said in a statement on Tuesday.

Under the scheme, Ministries have been asked to refund performance security, bid security, and liquidate damages forfeited/deducted during the Covid-19 pandemic. Certain relief has also been provided to MSMEs debarred for default in the execution of contracts during the Covid-19 period. The Ministry of Finance, through this scheme, decided to give additional benefits to eligible MSMEs, affected during the Covid-19 period, including a refund of 95 percent of the performance security, bid security, liquidated damages and risk purchase amount.

In case any firm has been debarred only due to default in execution of such contracts, such debarment shall also be revoked, by issuing an appropriate order by the procuring entity.

However, in case 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 shall be entertained.

The ministry clarified that no interest shall be paid on such refunded amount and the eligible claims shall be processed only through GeM.