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Home» Circulars» Msme’s Rbi Enhances Npa Recognition Period For Gst Registered Msmes Borrowers From 90 To 180 Days. Government To Amend Msme Criteria Based On Annual Revenue

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MSME’s RBI enhances NPA recognition Period for GST Registered MSMEs borrowers from 90 to 180 days. / Government to amend MSME criteria based on annual revenue
 
 

 

CHEMEXCIL
Basic Chemicals, Cosmetics & Dyes Export Promotion Council
(Set-up by Ministry of Commerce and Industry, Govt of India)

Jhansi Castle, 4th Floor, 7 Cooperage Road, Mumbai - 400 001.India.

Tel : +91 22 22021288 / * Fax : +91 22 22026684

* E-mail : info@chemexcil.gov.in Web : https://chemexcil.in

 

EPC/LIC/MSME’s            

9th Feb 2018

 

ALL MEMBERS OF THE COUNCIL

 

 

 

MSME’s

 

  • RBI enhances NPA recognition Period for GST Registered
  •  
  • MSMEs borrowers from 90 to 180 days.

 

Government  to amend MSME criteria based on annual revenue

 

 

 

Dear Members,

 

As we all know, MSME’s are the back bone of our  economy, but of-late these units are facing  financial distress due to major economic changes/ disruptions in our economy.

 

Taking cognizance of  the MSME issues, government has undertaken important steps which are being highlighted as follows  for your ready reference:

 

  • RBI enhances NPA recognition Period for GST Registered MSMEs borrowers from 90 to 180 days.

 

In a major relief to the medium and small enterprises sector, the RBI  has issued  Notification no.  RBI/2017-18/129 DBR.No.BP.BC.100/21.04.048/2017-18 February 07, 2018 wherein  GST-registered MSME borrowers will get a further 180-day window to pay dues if their accounts were standard as on August 31, 2017.

 

This relaxation will be applicable for dues between September 2017 and January 2018 if the aggregate exposure does not exceed Rs 25 crore. Banks and NBFCs will not be required to downgrade asset classification of these MSMEs. For further details, members may refer to RBI notification using below link.


https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11216&Mode=0
http://msme.gov.in/node/1803

 

Government to  amend  MSME criteria based on Annual Revenue

 

We understand that the Cabinet  has approved proposal to redefine micro, small and medium enterprises, or MSMEs, based on their annual revenue, replacing the current definition that relies on self-declared investment on plant and machinery.

 

Section 7 of the Micro, Small and Medium Enterprises Development (MSMED)  Act, 2006 will accordingly be amended to define units producing goods and rendering services in terms of annual turnover as follows:

 

  • A micro enterprise will be defined as a unit where the annual turnover does not exceed five crore rupees;
  • A small enterprise will be defined as a unit where the annual turnover is more than five crore rupees but does not exceed Rs 75 crore;
  • A medium enterprise will be defined as a unit where the annual turnover is more than seventy five crore rupees but does not exceed Rs 250 crore.

 

At present the MSMED Act (Section 7) classifies the Micro, Small and Medium Enterprises (MSMEs) on the basis of investment in plant and machinery for manufacturing units, and investment in equipment for service enterprises. The criterion of investment in plant and machinery stipulates self-declaration which in turn entails verification if deemed necessary and leads to transaction costs.

 

MSME Members are requested to take note of these important updates and do the needful, wherever applicable.  Feed-backs on these changes can be sent on ed@chemexcil.gov.in  &  deepak.gupta@chemexcil.gov.in .

 

Thanking You,

 

Yours faithfully,

 

S.G. BHARADI
EXECUTIVE DIRECTOR
CHEMEXCIL

 

http://chemexcil.in/uploads/files/MSME07021753E1582547B3409DBF8D72796D527B4A_(MSME_NPA).PDF

 

 

 

 

 

 

 

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