PF Contribution Of Employers & Employees Reduced From 12% To 10%; MSME Definition Changed : Finance Ministry Announcements

The Union Finance Ministry on Wednesday made several announcements with the aim of giving a boost to the Micro, Medium and Small Enterprises in the country which are reeling under the impact of COVID-19 lockdown.Among others, Nirmala Sitharaman, the Finance Minister, announced a change in the definition of MSMEs.Investment limit which defined MSME has been revised upwards, said the Minister.Additional criteria based on turnover to define MSMEs is brought in. Differentiation between "manufacturing" and "servicing" MSMEs will be removed.Investment can be up to Rs 1 crore and turnover can be upto Rs 5 crore, and the unit will still be Micro Enterprise.The changed criteria for MSME definition is as follows :Changed Criteria of MSMEs#NirmalaSitharaman #AatmaNirbharBharatAbhiyan pic.twitter.com/6jz4RpUvWB— Live Law (@LiveLawIndia) May 13, 2020Other measures for MSMEsThe Ministry announced collateral free automatic loan facility of Rs 3 lakh crores to MSMEs. Loans will have a four year tenure with 100% guarantee. They will be available till 31 Oct, 2020. Units with up to loan outstanding of Rs 25 crores or annual turnover of Rs 100 Crores can avail this collateral free loan facility."For stressed MSMEs, Rs 20,000 crore liquidity through subordinate debt-based scheme. Govt to provide Rs 4,000 crore to CGTMSE for this", the Minister said.Also, with a view to give a boost to local MSMEs, global tenders will be disallowed for tenders for govt procurement up to Rs 200 Crores.E-marketing linkage to be provided across the board to all MSMEs as trade fairs will be difficult in COVID-19 scenario.Every MSME receivable from Govt to be cleared within the next 45 days, assured the FM.PF contribution relaxationsThe Minister announced the reduction of statutory EPF contribution of private sector employers and employees from current mandated 12% to 10% for next 3 months. However, for government PSUs it will remain 12% but PSU employees can pay 10% This is done with the expectation of increasing the take home salary of the employees and to give relief to employers. The Minister said that the move is expected to increase the liquidity by Rs 6750 crores over the next three months.EPF contribution reduced for business and workers.#NirmalaSitharaman #AatmaNirbharBharatAbhiyan #EPFO pic.twitter.com/5vDlUoWXxY— Live Law (@LiveLawIndia) May 13, 2020Also, for the wage-earners below Rs 15,000 per month in businesses having less than 100 workers, the Government will continue to bear the 12% employee contribution and 12% employer contribution towards PF for the next three months.In the press conference held on March 26, the Minister had said that the Government will bear the EPF contribution of both employer and employees for such organisations for three months i.e till May 31, 2020.Also Read : [Breaking] COVID-19 Treated As 'Force Majeure' For Real Estate Projects; Contracts Of Central Agencies Extended By 6 Months : Finance MinisterAlso Read : TDS/TCS Rates Reduction; Deadline Extensions; Faster Refunds : Tax Measures Announced By FM As COVID-19 Relief

PF Contribution Of Employers & Employees Reduced From 12% To 10%; MSME Definition Changed : Finance Ministry Announcements

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