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April 4, 2022 In Others, Others, Policy and Regulatory, Premium, SME/MSMEs, Start-Ups, Video By editor

How MSMEs can be part of Global Value Chain? | Sanjay Notani | LawWiser

We all are aware of the role of MSMEs in shaping the Indian economy and now they also have various opportunities to tap globally. The Government of India has been consistently working with various countries such UK, Japan, Australia, the UAE, the European Union and many other countries for Free-Trade Agreements (FTAs). This is aimed to provide diverse export opportunities and open a wide market for MSMEs in India.

Watch Sanjay Notani, Partner, Economic Laws Practice (ELP) on LawWiser’s explainer on How MSMEs can be part of a Global Value Chain.

Sanjay very interestingly shares some key data providing insights on MSME about the MSMEs, how they constitute nearly 40 per cent of total exports, and more than half of them

are located in rural India. As per the data, India’s share of overall export to the USA is 15.30%, UAE 11.50%,

Hong Kong 4.60%, China 3.60%, and the United Kingdom 3.40%, respectively 7 and 40%

of this total export was by MSMEs. Out of all the existing MSMEs, 31% are engaged in the manufacturing sector and the remaining others are engaged in the service sector. Out of these 69% service sector MSMEs, almost 36% are engaged in trade.

He also shares the challenges faced by MSMEs and the steps taken by the Govt. He starts by highlighting the pain points of the market and taking us through the aspects of special and differential treatments. Aspects relating to Ethical Trade Imperatives (ETI) are also discussed. ETI imposes additional compliance burden through requirements such as those related to (not indulging in) child labour, observing work hours, health and safety of workers, wages and environment.

Lastly, he takes us through the geopolitics impact on the Indian MSME. India’s exports to Ukraine and Russia have mostly been led by MSMEs and hence, the current crisis may hit MSME exporters with multiple challenges such as delay in shipments, late payments, damage to consignments, and more.

Sanjay discusses all this and much more interesting aspects about how MSMEs can be part of a global value chain, watch the full video now.

April 4, 2022 In Alternate Dispute Resolution (ADR), Legal, Others, Premium, SME/MSMEs, Video By editor

Dispute Resolution & MSME | Dinesh Pednekar | LawWiser Premium

The Micro Small and Medium Enterprises Act, 2006 (MSMED Act) has been enacted for the growth and regulations of micro, small and medium enterprises (MSME) in India. It aims to facilitate the promotion, development and enhance the competitiveness of MSMEs.

The act also provides for dispute resolution for MSMEs.

Watch LawWiser’s explainer on Dispute Resolution and MSME by Dinesh Pednekar, Partner, Economic Laws Practice (ELP).

Dinesh shares that the act aims at facilitating the promotion and development of MSMEs and providing a mechanism for protection against delay in payment from a party and right of interest on delayed payment;

He takes us through the various important features provided under this act such as

-cause of action

– filing process

– jurisdiction

-role of the facilitation council

-conduct of arbitration

-challenging award

Apart from the provisions provided under the MSME Act, Dinesh also shares some key issues with regard to dispute resolution under this act. Like the MSME must be registered before initiating proceedings under the Act. The Jurisdiction will be the Facilitation Council where the supplier is located. The act provides for a two-tier process to resolve payment disputes. The Act will be set in motion if the buyer does not pay the supplier (being an MSE) on the agreed date and in no case beyond 45 days from the date of acceptance or the day

of deemed acceptance. Another important aspect to be aware of is that the Arbitration clause in a sale contract does not prevent the admission of the claim for statutory arbitration by the Facilitation Council under the Act.

Watch the full video to understand dispute resolution under the MSME Act.

March 25, 2022 In Corporate Commercial, Legal, Others, Premium, SME/MSMEs, Start-Ups By editor

Use of surety bonds: credit guarantee scheme- Sujjain Talwar ELP

The MSME sector is well catered for in all aspects of law and tax in India. In the Union Budget of 2022-23, the Finance Minister announced that the surety bonds will now be made acceptable in government procurements as a substitute for bank guarantees.

Watch now #LawWiser explainer video on “Use of surety bonds as a substitute for Bank Guarantees for MSMEs” featuring Sujjain Talwar, Partner, Economic Laws Practice (ELP) sharing key insights on this.

Sujjain shares that this announcement has been made with an aim to reduce the indirect cost for suppliers and work contractors. MSMEs are the strength of India’s entrepreneurial economy and the contractors are the assets. They depend heavily on payments coming on time, for their salaries and goods that have to be paid further. Their margins are also quite less. If in addition, MSMEs have to get a bank guarantee, it takes away from them high collateral margins, money commissions and puts the risk of NPA on them. This costs almost 10% of their tender cost that goes into procuring a bank guarantee, which is not allowed to be used elsewhere. On the other hand, insurance companies also seek to insure the risk.

There is a need for such products by the Insurance Companies that are less rigid in terms of commissions and premiums and therefore more palatable and acceptable to the MSME sector.

The MSME sector has also been asking for a reduction of the amount by the Government Financial Rules or GIFR on the procurement of contracts. This requires that there should always be performance security which is ranged from 5 to 10% of the contract value.

Learn more about the Use of surety bonds as a substitute for bank guarantees for the MSMEs by watching the full video.

#msmeindia #msme #msmesector #compliancesolutions #suretybonds #surety #GIFR #collateral #nps #margin #contracts #contract #assets #startup #startupindia #lawfirmmarketing #legalknowledge #legalindustry #video #knowledgesharing #platform

March 21, 2022 In Corporate Commercial, Legal, Others, Policy and Regulatory, Premium, SME/MSMEs, Start-Ups, Video By editor

Government’s Initiative and Challenges for Manufacturing Sector

The government of India adopted a series of measures to improve the economic situation including major reforms undertaken under the Atmanirbhar package to include Credit Guarantee for MSME loans, sectoral structural reforms, reduction in compliance burden and single window systems for clearances.

To boost the make in India drive, the government has also undertaken sectoral reforms such as in May 2020, the FDI was increased in defense manufacturing under the automatic route from 49% to 74%.

Watch now #LawWiser premium video on “Government’s Initiative and Challenges for the Manufacturing Sector” featuring Namrta Rai, Partner at Juris Corp, analyzing government initiatives in the manufacturing sector.

The government of India has also rolled out various schemes, which play a key role in business promotion and local manufacturing by MSMEs in the country, thereby providing impetus to them for further growth such as:

Prime Minister Employment Generation Programme (PMEGP) has been set up with an aim at providing financial assistance to self-employment ventures, in order to generate employment opportunities for unemployed youth and traditional artisans.

2. Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE) aims at motivating first-generation entrepreneurs towards self-employment by providing credit guarantee funding for third-party guarantee-free / collateral-free loans.

3. Financial Support to MSMEs in ZED Certification Scheme – To boost and support the ‘Make in India’ initiative, the scheme aims to inculcate Zero Defect & Zero Effect (ZED) practices in manufacturing done by Indian MSMEs and SMEs. MSMEs that supply to Defense can avail reimbursement additionally on Defense-related certificates/ Standards, but only once.

4. Lean Manufacturing Competitiveness Scheme – The scheme aims at enhancing the manufacturing competitiveness of MSMEs by introduction of Lean Manufacturing (LM) techniques – Increasing productivity; Inculcating good management systems; Reducing waste and Imbibing a culture of continuous improvement.

5. Then there is also the National Manufacturing Competitiveness Programme, which is also called (NMCP) – An umbrella scheme that aids MSMEs through the following sub-schemes:

Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
Marketing Support/Assistance to MSMEs (Bar Code)
Lean Manufacturing Competitiveness for MSMEs
Design Clinic for Design Expertise to MSMEs
Technology and Quality Upgradation Support to MSMEs
Entrepreneurial and Managerial Development of SMEs through Incubators
Enabling Manufacturing Sector to be Competitive through Quality Management Standards (QMS) and Quality Technology Tools (QTT)
Building Awareness on Intellectual Property Rights (IPR)

#manufacturingindustry #manufacturing #defence #defenceindustry #msmeloans #msmeindia #msmesector #sector #legalsector #Legalknowledge #legal #compliances #services #legalservices #schemes #financialassistance #intelligence #video

March 21, 2022 In Corporate Commercial, Legal, Others, Premium, Sectors, SME/MSMEs, Start-Ups, Video By editor

Investments Scenario in the Manufacturing Sector

Talking about investments in this sector, as per the statistics shared by the Ministry of Commerce and Industry, India has registered the highest ever annual FDI inflows of USD 81.97 billion in 2020-2021. Furthermore, from April 2000 to March 2020, the Cumulative Foreign Direct Investment (FDI) in the manufacturing sector of India was amounting to USD 100.35 billion, making India a preferred destination for manufacturing sector investments.

Watch now #LawWiser’s explainer on “Investments Scenario in the Manufacturing Sector” featuring Namrta Rai, Partner at Juris Corp sharing insights about MSME investments.

Some of the key investments in the manufacturing sector are:

In March 2020, Oricon Enterprises entered into a joint venture agreement with Italy-headquartered Tecnocap Group to set up a new company, Tecnocap Oriental, for manufacturing lug caps.
Last year in February, Amazon announced to start manufacturing electronic products in India, starting first with manufacturing of Amazon Fire TV stick.
Samsung started manufacturing mobile display panels at its Noida plant since last year. During the same time, Bharti Enterprises Ltd. and Dixon Technologies (India) Ltd., formed a joint venture to take benefit from government’s PLI scheme for the manufacturing of telecom and networking products.
Godrej Appliances rolled out a range of ‘Made-in-India’ air conditioners (AC) in April 2021. The investment plan of the Company involves investment of Rs. 100 Crore in its manufacturing units to boost its AC production capacity to 8 lakh units by 2025.
First Solar, an American solar panel company, plans to invest Rs. 4,800 crore (US$ 645.7 million) in its new 3.3-gigawatt (GW) manufacturing facility in Tamil Nadu.

#Manufacturing #Investments #Sector #fdi #inflow #commerce #msmeindia #MSME #amazon #appliances #amazon #entrepreneurship #knowledge #legalknowledge #legalnews #legalnewsindia #msmes #complianceservices

March 16, 2022 In Corporate Commercial, Legal, Others, Premium, Sectors, SME/MSMEs, Start-Ups, Video By editor

MSME Registration Benefits- Sheena Ogra- Alhawat & Associates Part 2

The Micro, Small and Medium Enterprises (“MSMEs”) form the foundation of India’s economy and are integral for the growth of employment, entrepreneurship and production in India. The functioning of the MSMEs in India is under the control of the Ministry of Micro, Small and Medium Enterprises.

Watch Now #LawWiser’s explainer on “Benefits of MSME Registration Part 2” featuring Sheena Ogra, Partner, Ahlawat and Associates sharing useful insights on proposals shared in the Union Budget 2022-23 for the advancement of the MSME Sector

Watch Sheena take us through the proposals introduced and benefits extended under Union Budget 2022

During the COVID-19 pandemic, a special scheme, i.e., the Emergency Credit Line Guarantee Scheme (“ECLG Scheme”) was launched by the Government of India which basically provides for 100% guarantee coverage to banks and NBFCs to enable them to extend emergency credit facilities to MSMEs in order to help the MSMEs meet their additional term loan and/or additional working capital requirements. Now, the finance minister has extended this ECLG Scheme up to March 31, 2023 and has further expanded the guarantee cover from INR 50,000/- crore to the total cover of INR 5,00,000/- crore.
Further, the Credit Guarantee Scheme will be revamped with the required infusion of additional credit of INR 2,00,000/- crore for MSMEs.
Udhyam (portal created for online registration of MSMEs),
e-shram (portal created for maintaining the database of the unorganized workers),
NCS (National Career Service) (portal created for providing employment and career-related services to the Indian citizens) and
ASEEM (Aatmanirbhar Skilled Employee Employer Mapping) (portal which acts as a directory of the skilled workforce) will be interlinked and their respective scopes will be widened.

They will now perform as portals that will provide G2C, B2C and B2B services.

In view of the foregoing, benefits that are extended to the MSMEs can only be availed through registration under the MSME Act.

Sheena also takes us through other details, tune in to watch the full video!

Stay tuned to more useful content related to #MSME and #Startups.

#MSME #registration #Benefits #compliance #scheme #tender #collateral #loan #subsidy #legalnews #legal #legalknowledge #unionbudget2022 #proposalsforMSME #aatmanirbharbharat

March 16, 2022 In Corporate Commercial, Legal, Others, Premium, Sectors, SME/MSMEs, Start-Ups, Trending, Video By editor

MSME Registration Benefits- Sheena Ogra

Watch Now #LawWiser’s explainer on “Benefits of MSME Registration Part 1” featuring Sheena Ogra, Partner, Ahlawat and Associates sharing useful insights on MSME registration and its benefits.

These are some of the MSME Registration Benefits that Sheena takes us through.

>Collateral Free Bank Loans

The Ministry, Government of India and Small Industries Development Bank of India (SIDBI) have jointly established a Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE/Trust).

>Subsidy on Patent and Trademark Registration

A subsidy of 50% (fifty per cent) on the cost of filing is given to the enterprise which is registered under the MSME Act.

>Tender preference to MSMEs

The MSMEs can get tender preferences as a result of the policies which have been notified under the MSME Act, allowing them benefits such as exemption from payment of Earnest Money Deposits under the tenders floated by the central ministry, department or public sector unit.

>ISO Certification Charges Reimbursement

The MSMEs can avail financial and monetary incentives in the form of reimbursement of the expenses incurred in obtaining certain ISO certifications such as ISO-9000 (which prescribes

>Protection against Delayed Payments

The MSME Act provides for the resolution of disputes in case of delayed payments made to MSME’s through the Micro and Small Enterprise Facilitation Council (“Council”), which is established by each State Government.

The government has also targeted additional MSME registration benefits such as:-

During the COVID-19 pandemic, a special scheme, i.e., the Emergency Credit Line Guarantee Scheme (“ECLG Scheme”) was launched by the Government of India which provides for 100% guarantee coverage to banks and NBFCs to enable them to extend emergency credit facilities to MSMEs to meet their additional term loan and/or additional working capital requirements.

Sheena also takes us through other details, tune in to watch the full video!

Stay tuned to more useful content related to #MSME and #Startups.#MSME#registration#Benefits#compliance#scheme#tender#collateral#loan#subsidy#legalnews#legal#legalknowledge

March 16, 2022 In Legal, Others, Premium, Sectors, SME/MSMEs, Start-Ups, Taxation, Video By editor

Section 148 of the Income Tax Act

Section 148 of the Income Tax Act, has been amended along with the insertion of new Section 148A by the Finance Act, 2021. With this, the process of reassessment has been revised and now the Assessing Officer has to comply with the provisions of Section 148A before issuance of a notice for reassessment under Section 148.

LawWiser takes you through Section 148 of the Income Tax Act, in an explainer by Paras Nath, Partner, TR Chadha &Co LLP.

Paras shares the analysis of this provision and recent judgments on the legal validity of notice issued under Section 148 of the Income Tax Act, issued after April 01, 2021.

In accordance with the power under Section 3(1) of the Relaxation Act, the CBDT had issued notifications extending the due dates for the issuance of Notices under erstwhile Section 148 from March 31, 2021, to firstly, till 30th April 2021 and subsequently to June 30, 2021. And, on the basis of this extension, Income Tax Department has issued notices to the assessee under erstwhile Section 148 which was applicable till March 31, 2021, i.e., without adhering to the requirements of Section 148A.

With notices issued by the Income-tax Department during this extended time limit, the question arises regarding the validity of such Notices issued between April 01, 2021, to June 30, 2021, on the grounds that whether two different provisions in relation to the process of reassessment can be applicable at a time and whether the Relaxation Act gives the power to choose between two Finance Acts for issuance of Notice

On the issue of validity Paras takes us through some key cases filed before various High Courts. Watch the full video to understand the issue better.

Stay tuned for more insightful content related to compliances for #MSME and #startups

#incometax #section148ncometaxact #taxexemption #notice #incometaxdepartment #cbdt #highcourt #supremecourtofindia #MSME #msmeindia

March 16, 2022 In Legal, Others, Others, Premium, SME/MSMEs, Start-Ups, Video By editor

Pre-Construction Approvals for Manufacturing Factories

The aim of the Indian legislature has been to streamline the process but not make it cumbersome. For the set-up of a Manufacturing factory in India, a manufacturer is required to obtain pre-construction approvals from various government authorities. The requirements may vary from state to state, however, standard approvals are essential in all states and union territories in India.

In this video of LawWiser, understand Pre-Construction Approvals for Manufacturing Factories by Amrita Grover, Senior Associate, Athena Legal. She discusses all such standard pre-construction approvals required for setting up Manufacturing Factories in India.

Amrita takes us through some important pointers to keep in mind for such pre-construction approvals like,

-License for the set-up of the Manufacturing Unit

Under the provision of Section 4 of the Factories Act, for the construction of a manufacturing unit, the manufacturer is required to obtain, either registration or Industrial Entrepreneurs’ Memorandum or Industrial License, depending on the business format. The same may be obtained from either the District Industry Centre in the case of Small Scale Industries (SSI) or the Secretariat of Industrial Assistance (SIA) in the case of large and medium industries.

– Identification of Land/Plot/Building/Shed:

For the set-up of a Unit, the first and foremost step will be the identification of a land/plot/building for its establishment and gaining a title. The title obtained must enable the manufacturer to set up the unit. Such land may be obtained either through the corporations or by the Manufacturer on its own. However, or the gaining of a title either a registered sale deed or a registered lease deed must be executed in the name of the manufacturer. The Manufacturer must ensure that there are no encumbrances on the acquired title as the same can have fatal effects on the business initiated in the premises.

– Important NOCs and consent under Water and Air Pollution Control Acts:

With industrial growth, the protection of the environment has become an increasing concern and therefore, an industrial set-up requires approvals and clearances to be obtained from the State Pollution Control Board for the proposed set-up by declaring the level of pollution that may be caused.

Watch the full video to understand all these pre-construction approvals better.

Stay tuned to LawWiser for such insightful content.