The Ministry of finance has launched the Scheme ‘Vivad se Vishwas’ to assist the MSME’s who got impacted during Covid 19 as settlement scheme for Micros, small and medium (MSME) based business. The last date of submission to claim is 30 June 2023, and MSME’s must make payments to secure Government based tenders. These tenders are performance bid security ‘fee’.
The scheme aims to ease the financial burden on MSMEs by returning 95% of the forfeited bid fee or performance security in case of the non-execution of contracts during the COVID pandemic. The scheme was announced by Finance Minister Nirmala Sitaraman, in her Budget speech for 2023.
The Vivad se Vishwas Scheme will provide access to institutional financing to MSMEs. MSME’s can put back the freed-up capital into their cash flows. It will also support many MSME suppliers inflicted with penalties or forfeited bank guarantees due to pandemic.
Key eligibility for Vivad Se Vishwas Scheme. The government will provide relief in all contracts for the procurement of services and goods entered into any department, ministry, attached/subordinate office, autonomous body, Central Public Sector Enterprise (CPSE) or public sector financial institution, etc., with MSMEs fulfilling the following criteria:
• The supplier or contractor should be registered as MSME with the Ministry of MSME as of 31.03.2022.
• The original completion or delivery period of the contract was between 19.02.2020 and 31.03.2022.
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What are the key benefits of Vivad se Vishwas Scheme? The Ministry of Finance has decided to provide the following benefits to the eligible MSMEs under this scheme:
• Refund of 95% of the performance security forfeited from the eligible MSMEs.
• Refund of 95% of the bid security (earnest money deposit) forfeited from MSMEs in tenders opened between 19.02.2020 and 31.03.2022.
• Refund of 95% of the Liquidated Damages (LD) deducted from MSMEs. The refunded LD cannot exceed 95% of the performance security stipulated in the contract.
• Refund of 95% of the risk purchase amount.
• In case MSMEs have been debarred due to default in the execution of contracts, such debarment will be revoked by issuing an appropriate order by the procuring entity. However, in case an MSME has been ignored for placement of a contract due to debarment in the interim period, i.e., date of debarment and revocation, no claim will be entertained.
• Interest will not be paid on the refunded amount. Key Functionality for Vivad se Vishwas Scheme How does MSME’s apply for the scheme.
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The Government e-Marketplace (GeM) will facilitate an online portal to grant refunds under the Vivad se Vishwas Scheme I. The functionality of the online portal will be as follows:
Step 1: GeM will facilitate functionality for MSME vendors to register on the portal through authorised personnel.
Step 2: The registered contractor will list the applicable contracts on the portal. The list of the procuring entities will be available through the drop-down menu, which can be changed only with the approval of the Department of Expenditure. The details of the dispute should contain the following details:
• Contact number.
• Contracting authority.
• Paying authority.
• Deducted/forfeited amount.
Step 3: GeM portal will inform the nodal officers of each procuring entity through email to verify the claim of the MSME vendor.
Step 4: After due diligence and refund of the due amount, the nodal officer of the procuring entity
will update the portal with the refund amount, date and transaction details of the payment.
Step 5: The GeM will provide the reports to track the pendency in each procuring entity.
Vivad se Vishwas Scheme helpline numbers. The helpline for Vivad se Vishwas Scheme is – 011-69095777