SMEs

Vivad se Vishwas Scheme for MSMEs: How contractors can claim refund of 95% forfeited amount during Covid

Vivad se Vishwas Scheme for MSMEs: How contractors can claim refund of 95% forfeited amount during Covid:

The Vivad Se Vishwas I – Relief for MSMEs scheme, announced by Finance Minister Nirmala Sitharaman in the budget and launched in April, provides relief to Micro, Small, and Medium Enterprises (MSMEs) that were unable to execute government contracts during the Covid period. The scheme allows for a refund of various amounts related to the arrangements.

Under the scheme, MSMEs can claim a refund of 95% of the performance security, 95% of the bid security, 95% of the liquidated damages (LD), and 95% of the risk purchase amount forfeited or deducted. This refund applies to MSMEs that faced challenges in executing government contracts during the Covid period.

What is Vivad se Vishwas Scheme? | Sharda Associates

Furthermore, the scheme also provides a mechanism for revoking the debarment of companies barred from participating in future contracts due to default execution. By issuing an appropriate order, the procuring entity can lift the debarment. However, it’s important to note that the scheme does not cover claims for contracts not awarded to a company during the interim period between the debarment and its revocation.

The Vivad Se Vishwas I – Relief for MSMEs scheme aims to support and provide relief to MSMEs that faced difficulties during the Covid period, enabling them to recover a significant portion of the amounts related to government contracts. It also allows companies to regain their eligibility for future contract participation by lifting the debarment.

By implementing this scheme, the government seeks to alleviate the financial burden on MSMEs and promote their participation in government contracts. This initiative recognizes the challenges MSMEs face during the pandemic and aims to provide them with the necessary support to recover and resume their business operations.

Under the Vivad Se Vishwas I – Relief for MSMEs scheme, it is essential for Small and Medium Enterprises (SMEs) to be registered under the Udyam registration system at the time of filing for a refund. This registration is a prerequisite for availing the benefits of the scheme.

In addition, to be eligible for the scheme, the original delivery period or completion period specified in the contract should fall between February 19, 2020, and March 31, 2022. This ensures that the relief applies to contracts affected during the period impacted by the Covid-19 pandemic.

To initiate the refund process, SMEs must provide specific details to the procuring entity. These details include the contract number, contracting authority, paying authority, and the amount deducted or forfeited from the contract. By sharing this information, SMEs facilitate verifying and processing their refund claims.

By specifying the Udyam registration requirement and setting the time frame for eligible contracts, the scheme ensures relief to registered SMEs affected by the pandemic during the specified period. The project aims to alleviate the financial burden on SMEs and enable them to recover a significant portion of the amounts deducted or forfeited from government contracts, supporting their financial stability and promoting their participation in future contract opportunities.

Centre eases provisions of Vivad se Vishwas scheme - The Economic Times

To file a claim under the Vivad Se Vishwas I – Relief for MSMEs scheme, follow the steps below:

  1. Ensure your MSME is registered on the Government e-Marketplace (GeM) portal as a seller with a complete and validated profile. This includes providing details such as PAN validation, date of business incorporation, and CIN (Corporate Identification Number).
  2. Update your GeM profile with the Udyam number and validate it in the “My Account” section.
  3. Once your Udyam number is validated, go to the GeM dashboard and click the “Vivad se Vishwas – 1” link to access the scheme’s dashboard.
  4. To initiate a new claim request, click “New Claim Request.”
  5. If the contract was raised on GeM during the Covid period, select the contract from the “Please Select Type of Contract/Bid” dropdown and choose the appropriate “Claim Type”, such as LD or performance security refund.
  6. For contracts raised on GeM, the “Organization Details” section will be auto-populated, including information about the organization type, ministry, department, office zone, buyer name, address, final claim amount, etc.
  7. If the contract was raised outside GeM, you must manually fill in the details such as contract number, date, etc. Additionally, upload relevant documents such as the contract document per the claim requirements.
  8. Click the “Preview” button to review the information provided and ensure accuracy. Then, click on “I Agree” to submit the claim form.
  9. Once submitted, your claim form will be visible on the dashboard with a claim ID starting with “CL.” You can view details such as the claim type, ministry and department against which the claim was submitted, location, and the claim status.
  10. The claim status will show as “Pending” if action is required from the buyer, “Approved” or “Partially Approved” if the claim is approved for a lesser amount than claimed, “Settled” once the payment is made, or “Rejected” along with the reason for rejection if the claim is not accepted.HC directs SBI to refund forfeited money | Deccan Herald

Following these steps, you can file a claim under the Vivad Se Vishwas I – Relief for MSMEs scheme on the GeM portal, ensuring the necessary details are provided and the required documents are uploaded for the claim process.

 

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