Vivad se Vishwas Scheme for MSME - Latest Update, How to Apply, Eligibility

Latest Update:

The last date for submission of claims under Vivad se Vishwas scheme is 31.12.2023.

The Finance Minister, Nirmala Sitharaman, announced a settlement scheme for the MSMEs (Micro, Small and Medium Enterprises) in her Budget speech for 2023-24. The settlement scheme for MSMEs was announced under the Vivad se Vishwas scheme.

What is Vivad se Vishwas Scheme I?

MSMEs must make a payment to the government or government undertakings in order to secure government tenders. This is known as the performance guarantee security or bid fee. Under the Vivad se Vishwas I - Relief for MSMEs, the government undertakings and government will refund performance security, bid security and liquidated damages forfeited/ deducted during the COVID-19 pandemic. It will return 95% of the forfeited bid fee or performance security to the MSMEs in case of failure to execute contracts by them during the COVID pandemic.

Eligibility for Vivad se Vishwas Scheme I

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.

Reliefs provided under Vivad se Vishwas Scheme I 

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 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.

Requirements to apply for Vivad se Vishwas Scheme I

• Valid Permanent Account Number (PAN) 
• Date of Incorporation/Registration of business 
• CIN (Company Information Number) in the case of private/public limited company 
• MSME Registration from Udyam portal

How to apply to Vivad se Vishwas Scheme I for MSMEs?

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:

• GeM will facilitate functionality for MSME vendors to register on the portal through authorised personnel.
• 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.
• GeM portal will inform the nodal officers of each procuring entity through email to verify the claim of the MSME vendor.
• 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.
• The GeM will provide the reports to track the pendency in each procuring entity.

How can MSME sellers raise a claim on the GeM portal?

MSME sellers must first register on the GeM portal to raise a claim under the Vivad se Vishwas Scheme I. The following are the steps to register and raise a claim on the GeM portal:

Step 1: Log in to the GeM portal by entering the seller user ID and password.

Step 2: Go to the ‘Account Profile’ page and complete the ‘Business Profile’ and ‘Organisation Profile’. Ensure to complete the business PAN validation, enter the date of incorporation and Udyam registration number.

Step 3: Click the ‘Vivad se Vishwas -1' option. The Vivad se Vishwas - 1 dashboard will be displayed. Here, Sellers can view all the claims and their status.

Step 4: Click the ‘New Claim Request’ button to raise a claim. 

Step 5: Fill out the 'New Claim Request' form and click the 'Submit' button.

Step 6: Buyers can see the claims on their dashboard. Buyers can take action on a claim by clicking on the ‘Claim ID’.

Step 7: Buyers can take the following actions on a claim - approve, reject, transfer or settle the claims. Once the buyers take action on a claim, it will be reflected on the seller's dashboard.

Last date to apply for Vivas se Vishwas Scheme I

The Vivas se Vishwas Scheme I commenced on 17.04.2023 and the last date for submission of claims is 31.12.2023.

Benefits to MSMEs from Vivad se Vishwas Scheme I

The Vivad se Vishwas Scheme I will provide access to institutional financing to MSMEs. The return of the performance guarantee or bid fee paid to secure government or government undertaking tenders will increase the capital of MSMEs. They 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 Covid.

Vivad se Vishwas Scheme helpline numbers

The helpline for Vivad se Vishwas Scheme is 011-69095777