Unsecured Loans for SMEs under Growth Capital and Equity Assistance Scheme

In the initial stages of an SME, providing collaterals to banks for availing loans becomes difficult for the institution. The low moratorium period of 365 days, makes it impossible for them to pay back the loan in time too. Furthermore, SMEs are sometimes in businesses that do not have tangible outputs namely viz. Marketing, Brand Building, Creation of Distribution Network, Technical Know-how, R&D, Software Purchase, etc. The unavailability of tangible assets makes it difficult for many lenders to sanction loans. To serve a solution to this problem, SIDBI has initiated the Growth Capital and Equity Assistance Scheme.

Overview:

Under the Growth Capital and Equity Assistance scheme, an SME can get collateral free and high moratorium period loans (unsecured loans).

Benefits:

How does an SME body benefit from this scheme?

An SME body can benefit from this scheme in the following ways:

This scheme offers collateral free loans for all growth-based activities with the following points to consider:

  1. The interest rate is higher (2%-3% depending on your CRISIL SME Rating) than that offered by other banks.
  2. These type of loans fall into a category called mezzanine financing, i.e., the lenders can ask for a share in your company in case you are a defaulter. 

Eligibility Criteria:

What is the eligibility criteria for this scheme?

An SME is eligible for this scheme if you fall under the following categories:

  • SIDBI’s existing customers (meeting internal rating criteria)
  • Units with past 3 years of profitability and 2 years of satisfactory banking credit track record (meeting internal credit rating criteria) 

Application

How can an SME body apply for this scheme?

An SME body can apply for this scheme by following the below listed instructions:

  • Entrepreneur/Entity can approach SIDBI branch for seeking financial assistance and share their profile with SIDBI.
  • SIDBI issues application to the entity if prima facie found support-worthy after scrutiny of profiles on the basis of eligibility criteria.
  • SIDBI may also depending on the quantum of loan required, engage a firm to carry out the Corporate Due Diligence on the entity (cost to be borne by the firm).
  • The entity submits a duly filled detailed application form to SIDBI along with all checklist documents. 

Documents Required

What are the documents required to apply for this scheme

  • The following list of documents are required at the time of application:
  • KYC form – address proof and Identity proof
  • Proof of the loan with SIDBI
  • Copy of CRISIL SME Ratings
  • Copy of last 3 years’ audited financial statements and bank statement for the past 2 years

To know more about this scheme, click here.

Reclaim your Money with the Bills Rediscounting Scheme

Almost every business enterprise has a stack of outstanding bills that the buyer is yet to honor. Needless to say, the MSME may need the finances for various purposes urgently. This is where the Bills Rediscounting scheme comes in.

Overview

The Bills Rediscounting Scheme by the government enables MSMEs to receive money against their outstanding bills by approaching any of the scheduled commercial banks and getting it discounted. `This enables an MSME to sell the bill to the bank. For instance, if an applicant has a bill for ₹10,000, the bank will collect it instead, and will pay the applicant back an amount slightly less than ₹10,000.

Benefits

How does an MSME benefit from this scheme?

The MSME is paid back up to 100% of the amount on the bill. 

Eligibility Criteria

What is the eligibility criteria for this scheme?

The criteria for an applicant to be eligible for this scheme is as follows:

  • The bill to be rediscounted by the applicant must not be older than 90 days 

Application

How can an MSME apply for this scheme?

To apply for this scheme and get the bills discounted, an MSME can approach any of the banks listed here.

For further details, please click here

Revive your Sick Industrial Unit with this Scheme

Small Scale Industries highly contribute to a country’s GDP making it tremendously beneficial for the economy. The Indian government has many schemes in the favour of these SSI Units. However, many SSI units fail to succeed and are categorised as sick units. This is where the Rehabilitation of Sick Units Scheme comes into the picture.

Overview

The Rehabilitation of Sick Units Scheme is an attempt to help revive sick SSI units before they become irrecoverable. This scheme provides timely loans that can help a sick unit meet its payment obligations and enables banks to take action at an early stage for revival of these units.

Benefits

How does a Sick Industrial Unit benefit from this scheme?

A Sick Industrial Unit benefits from this scheme in the following ways:

  • The scheme provides term loan for purchase of fixed assets and loan for working capital* through a single agency. (The total working capital requirement of such units is inclusive of all fund-based facilities. This has to be taken into account while determining the working capital facility that is eligible for refinance.)
  • No interest on the interest amount for up to three years from the date of commencement of implementation of the rehabilitation programme.
  • Reduction in rate of interest in term loans up to 3% in the case of tiny/decentralised sector units and by not more than 2% for other SSI units.
  • Principal dues may be treated as irregular to the extent of its drawing power. This amount may be funded as Working Capital Term Loan (WCTL) with a repayment schedule not exceeding 5 years.
  • The rate of interest applicable may be 1.50% to 3% points below the prevailing fixed rate or prime lending rate, wherever applicable, to all sick SSI units including tiny and decentralised units.
  • Cash losses are likely to be incurred in the initial stages of the rehabilitation programme till the unit reaches the break-even level.
  • Interest may be charged on the funded amount at the rates prescribed by SIDBI under its scheme for rehabilitation assistance.
  • Interest on working capital may be charged at 1.5% below the prevailing fixed or prime lending rate wherever applicable. Additional working capital limits may be extended at a rate not exceeding the prime lending rate.
  • For meeting escalations in capital expenditure to be incurred under the rehabilitation programme, banks/financial institutions may provide, where considered necessary, appropriate additional financial assistance up to 15% of the estimated cost of rehabilitation by way of contingency loan assistance.
  • Interest on this contingency assistance may be charged at the concessional rate allowed for working capital assistance.
  • Banks may provide the loan for start-up expenses, while margin money assistance may either come from SIDBI under its Refinance Scheme for Rehabilitation or should be provided by State Government where it is operating a Margin Money Scheme.
  • Interest on fresh rehabilitation term loan may be charged at a rate 1.5% below the prevailing fixed or prime lending rate wherever applicable or asby SIDBI / NABARD where refinance is obtained from it for the purpose.
  • Promoter’s contribution towards the rehabilitation package is fixed at a minimum of 10% of the additional long-term requirements under the rehabilitation package in the case of tiny sector units and at 20% of such requirements for other units. In the case of units in the decentralized sector, promoter’s contribution may not be insisted upon.
  • At least 50% of the above promoters’ contribution should be brought in immediately and the balance within six months.
  • Banks should incorporate a ‘Right of Recompense’ clause in the sanction letter and other documents to the effect that when such units turn the corner and rehabilitation is successfully completed, the sacrifices undertaken by the financial institutions and banks should be recouped from the units out of their future profits/ cash accruals.

Eligibility Criteria:

What is the eligibility criteria for this scheme?

A Sick Unit is eligible for this scheme if it falls in the following categories:

  • The SSI unit should be a “sick” unit as per RBI definition. Please refer to this link for the complete definition.
  • It is based on the bank’s conviction that the unit is capable of being restored to normal health within a reasonable time.

Application

How can Sick units apply to this scheme?

SSI units can apply for this scheme by visiting the website of the individual banks and financial institutions for the required application forms.

For instance, the form to be filled for applying to Andhra Pradesh State Financial Corporation can be availed by clicking here.

Documents required

What are the documents required to apply for this scheme?

The documents and forms which needs to be submitted by the applicant is listed on the websites of the respective bank/financial institute. 

List of participating institutions

List of institutions offering the scheme are as follows:

State Financial Corporations 

  • Andhra Pradesh State Financial Corporation
  • Assam Financial Corporation
  • Bihar State Financial Corporation
  • Delhi Financial Corporation
  • Gujarat State Financial Corporation
  • Maharashtra State Financial Corporation
  • Haryana State Financial Corporation
  • Himachal Pradesh Financial Corporation
  • Jammu and Kashmir State Financial Corporation
  • Karnataka State Financial Corporation
  • Kerala Financial Corporation
  • Madhya Pradesh Financial Corporation
  • Orissa State Financial Corporation
  • Punjab Financial Corporation
  • Rajasthan Financial Corporation
  • Tamil Nadu Industrial Investment Corporation Limited
  • Uttar Pradesh Financial Corporation
  • West Bengal Financial Corporation

State Industrial Development Corporations / State Industrial Investment Corporations

  • Andaman and Nicobar Islands Integrated Development Corporation Ltd.
  • Andhra Pradesh Industrial Development Corporation Ltd
  • Arunachal Pradesh Industrial Development and Financial Corporation Ltd
  • Assam Industrial Development Corporation Ltd
  • Bihar State Credit and Investment Corporation Ltd
  • Economic Development Corporation of Goa, Daman and Diu Ltd.
  • Gujarat Industrial Investment Corporation Ltd
  • Haryana State Industrial Development Corporation Ltd.
  • Himachal Pradesh State Industrial Development Corporation Ltd
  • Industrial Promotion and Investment Corporation of Orissa Ltd.
  • Jammu & Kashmir State Industrial Development Corporation Ltd.
  • Karnataka State Industrial Investment Corporation Ltd.
  • Kerala State Industrial Development Corporation Ltd.
  • Madhya Pradesh State Industrial Development Corporation Ltd.
  • Manipur Industrial Development Corporation Ltd.
  • Meghalaya Industrial Development Corporation Ltd.
  • Nagaland Industrial Development Corporation Ltd.
  • Omnibus Industrial Development Corporation of Daman & Diu and Dadra and Nagar Haveli Ltd. [OIDC]
  • Pondicherry Industrial Promotion and Investment Corporation Ltd.
  • Pradeshya Industrial and Investment Corporation of Uttar Pradesh Ltd.
  • Punjab State Industrial Development Corporation Ltd
  • Rajasthan State Industrial Development and Investment Corporation Ltd
  • Sikkim Industrial Development & Investment Corporation Ltd.
  • State Industrial and Investment Corporation of Maharashtra Ltd
  • State Industries Promotion Corporation of Tamil Nadu Ltd.
  • Tripura Industrial Development Corporation Ltd.
  • West Bengal Industrial Development Corporation Ltd
  • Mizoram Industrial Development Corporation Ltd. 

Commercial Banks

  • Alegemene Bank Nederland N.V.
  • Allahabad Bank
  • American Express International Banking Corporation
  • Andhra Bank
  • Bank of America
  • Banque Indosuez
  • Bank of Bahrain and Kuwait B.S.C.
  • Banque National De Paris
  • Bank of Baroda
  • Bareilly Corporation Bank Ltd.
  • Bank of India
  • Benaras State Bank Ltd.
  • Bank of Madura Ltd.
  • Bharat Overseas Bank Ltd.
  • Bank of Maharashtra
  • British Bank of the Middle East
  • Bank of Nova Scotia
  • Canara Bank
  • Bank of Rajasthan Ltd.
  • Catholic Syrian Bank Ltd.
  • Bank of Tokyo Ltd.
  • Central Bank of India
  • Citibank
  • Corporation Bank
  • Dena Bank
  • Deutche Bank
  • Dhanalakshmi Bank Ltd.
  • Emirates Commercial Bank Ltd.
  • Federal Bank Ltd.
  • Grindlays Bank
  • Hongkong and Shanghai Banking Corporation
  • Indian Bank
  • Indian Overseas Bank
  • Jammu and Kashmir Bank Ltd
  • Karnataka Bank Ltd
  • KarurVysya Bank Ltd.
  • Kumbakonam City Union Bank Ltd
  • Lakshmi Vilas Bank Ltd.
  • Lord Krishna Bank Ltd.
  • Mitsui Bank Ltd.

Co-operative Banks: 

  • Andhra Pradesh State Co-operative Bank Ltd
  • Bihar State Co-operative Bank Ltd.
  • Gujarat State Co-operative Bank Ltd.
  • Karnataka State Co-operative Bank Ltd.
  • Kerala State Co-operative Bank Ltd.
  • Maharashtra State Co-operative Bank Ltd.
  • Madhya Pradesh RajyaSahakari Bank Maryadit
  • Manipur State Co-operative Bank Ltd.
  • Meghalaya Co-operative Apex Bank Ltd.
  • Orissa State Co-operative Bank Ltd.
  • Punjab State Co-operative Bank Ltd.
  • Rajasthan State Co-operative Bank Ltd.
  • Tamil Nadu State Co-operative Bank Ltd.
  • Uttar Pradesh Co-operative Bank Ltd.
  • West Bengal State Co-operative Bank Ltd.
  • Delhi State Co-operative Bank Ltd.
  • Apex Co-operative Bank of Urban Banks of Maharshtra & Goa Ltd.
  • Himachal Pradesh State Co-operative Bank Ltd

Other Scheduled Co-operative Banks:

  • Abhyudaya Co-operative Bank Ltd.
  • Bombay Mercantile Co-operative Bank Ltd.
  • Cosmos Co-operative Bank Ltd.
  • Kalupur Commercial Co-operative Bank Ltd.
  • Rajkot Nagrik Sahakri Bank Ltd.
  • Rupee Co-operative Bank Ltd.
  • Sangli Urban Co-operative Bank Ltd.
  • Saraswat Co-operative Bank Ltd.
  • Surat Peoples Co-operative Bank Ltd.
  • Shamrao Vithal Co-operative Bank Ltd.
  • P. Mahesh Urban Co-operative Bank Ltd.
  • The Ahmedabad Mercantile Co-op Bank Ltd.
  • Akola Urban Co-operative Bank Ltd.
  • The Akola Janata Commercial Co-operative Bank Ltd.
  • The Khamgaon Urban Co-operative Bank Ltd.
  • Nagpur Nagarik Sahakari Bank Ltd.
  • Shikshak Sahakari Bank Ltd

For further details on this scheme, please click here.

Scheme for Multiple Fund Requirements for Small Scale Industry Entrepreneurs

Scheme for Multiple Fund Requirements

Capital – a critical resource for every Small Scale Industry business is broadly categorised in two forms. The short-term capital is utilised for daily expenditures, while the long-term is utilised for assets and investments. SSI Businesses, most often, require loans to meet these capital needs; but as the nature of these loans is quite different, they are usually sourced from different institutions. With the Single Window Scheme, all these facilities are available in one place.

Overview

The Single Window Scheme helps an SSI promoter avail both; a term loan for fixed assets, and working capital loan through the same agency. An important point to note here is that the loan limit under this scheme cannot exceed ₹.

Benefits

How can an SSI unit benefit from this scheme?

An SSI Unit can benefit from this scheme in the following ways:

  • Procurement of factory land and construction of building spaces.
  • Procurement of machinery like lab equipment, testing equipment, etc.
  • Meeting capital requirements like raw materials, stock-in-progress, finished goods
  • Additional assistance for meeting the urgent needs of raw material.

Eligibility

What is the eligibility criteria for this scheme?

An SSI Unit is eligible for this schemes if it falls in the following categories:

  • Entrepreneurs setting up new projects in SSI / Tiny sector
  • New promoters acquiring unencumbered fixed assets of existing SSI concerns from PLIs
  • Existing well-run units undertaking modernisation / technology upgradation
  • Potentially viable sick units undertaking rehabilitation scheme

Application

How can an SSI Unit apply for this scheme?

An SSI Unit can apply for this scheme by visiting the banks and financial institutions listed below:

  • State Financial Corporations (SFCs)
  • Twin function IDCs
  • Scheduled commercial banks
  • Eligible state co-operative banks
  • Scheduled urban co-operative banks

For more information regarding this scheme, kindly click here.

Simplify your loan requirements with the Composite Loan Scheme

In the early stages of a business, MSMEs often find the need to apply for loans in order to fund their processes. Sometimes they have to apply for two separate loans to fund working capital requirements and long term projects. Needless to say the hassle of applying for two separate loans can be avoided by applying for a single loan, i.e. the Composite Loan Scheme.

Overview

The Composite Loan Scheme allows an MSME to apply for a single loan to fund working capital requirements and long term projects instead of two separate loans.

Benefits

How does an MSME benefit from this scheme?

An MSME can avail of composite loans up to 75% of the value of the project or ₹ 25 lakh, whichever is lower.

Eligibility Criteria

What is the eligibility criteria for this scheme?

Those projects with a debt to equity ratio of 3:1 in the total venture of outlay (i.e., cost of the project plus working capital requirement) after taking into account the amount of investment/subsidy/incentive available for the project are eligible to apply for this scheme.

Application

How can an MSME apply for this scheme?

An MSME can apply for this scheme offline by approaching banks and state finance corporations.

An MSME can apply for this loan online here.

General Conditions

What are the general conditions under this scheme?

The following are the general conditions under this scheme:

  1. Working Capital loan should be availed within one year from the date of commencement of production.
  2. The unit should open a current account with a designated bank and the amount of Working Capital of the loan will be credited as and when disbursed by the Corporation.
  3. Support for preparation of DPR up to 0.5% of the project cost or ₹1 lakh whichever is lower. This support will be given subject to the fact that the project is sanctioned by NABARD. The grant amount would be within the overall cap of 20% stated above.
  4. The unit should route its entire transaction of the  business including all the receipts and payments through this account only.
  5. Exclusive grant support for taking forward SHGs/farmers’ clubs/producer groups to the stage of having a Producers Organization. Separate scheme would be formulated for this purpose when need arises for such a support.
  6. The unit should repay the entire Working Capital loan sanctioned by the Corporation at once in case the unit approached the bank for more Working capital.
  7. Working Capital Component should be repaid over a period not exceeding 10 years (including moratorium up to 13 years) and the term loan Component over a period not exceeding 8 1/2 years (including moratorium of 18 months).
  8. The unit should provide monthly stock statement showing the position of inventory level of the Corporation. If they fail to provide the same, the Corporation may recall the loan.
  9. Any other support felt necessary for enabling a Producers Organization function in a better and profitable manner subject to the recommendation of ED Committee and with the approval of Chairman/MD.

For further information on this scheme, please click here.

Dairy Entrepreneurship development scheme

Dairy farming is an excellent opportunity for self-employment and income generation in India. In an attempt to further the interest and development of this field, the government has the perfect funding solution with the Dairy Entrepreneurship Development Scheme.

Overview:

The Dairy Entrepreneurship Development Scheme offers financial assistance in the form of interest free loans (IFL) to the beneficiary.

Benefits:

The following table states the amount of subsidy offered for each component:

Serial No. Component Unit cost Pattern of assistance
No. of units Farmer category Subsidy outlay (%) Subsidy limit (₹)
1. Establishment of small dairy units with crossbred cows/ indigenous milk cows like Sahiwal, Red Sindhi, Gir, Rathietc / graded buffaloes up to 10 animals ₹5.00 lakh for maximum 10 animal unit – minimum unit size is two animals 10 animals Others 25.00 ₹1.25 lakh
SC/ST farmers 33.33 ₹1.67 lakh
2 animals Others 25.00 ₹25,000.00
SC/ST farmers 33.33 ₹33,300.00
2. Rearing of heifer calves – cross bred, indigenous descript milch breeds of cattle and of graded buffaloes – up to 20 calves ₹4.80 lakh for maximum 20 calf unit – minimum unit size of 5 calves 20 calves Others 25.00 ₹1.20 lakh
SC/ST farmers 33.33 ₹1.60 lakh
5 calves Others 25.00 ₹30,000.00
SC/ST farmers 33.33 ₹40,000.00
Farmer category Subsidy outlay (%) Maximum ceiling (₹)
3. Vermicompost (With milch animal unit. To be considered with milch animals and not separately) ₹20,000.00 Others 25.00 ₹5,000.00
SC/ST farmers 33.33 ₹6,700.00
4. Purchase of milking machines/milk testers/bulk milk cooling units (up to 2,000 litre capacity) ₹18.00 lakh Others 25.00 ₹4.50 lakh
SC/ST farmers 33.33 ₹6.00 lakh
5. Purchase of dairy processing equipment for manufacturing milk products ₹12.00 lakh Others 25.00 ₹3.00 lakh
SC/ST farmers 33.33 ₹4.00 lakh
6. Establishment of dairy product transportation facilities and cold chain ₹24.00 lakh Others 25.00 Rs,6.00 lakh
SC/ST farmers 33.33 ₹8.00 lakh
7. Cold storage facilities for milk and milk products ₹30.00 lakh Others 25.00 ₹7.50 lakh
SC/ST farmers 33.33 ₹10.00 lakh
8. Dairy marketing outlet / Dairy parlour ₹56,000.00 Others 25.00 ₹14,000.00
SC/ST farmers 33.33 ₹18,600.00
      Clinic Category Subsidy outlay Maximum ceiling (₹)
9. Establishment of private veterinary clinics Mobile clinic – ₹2.40 lakh and Stationary clinic – ₹1.80 lakh Mobile Others 25.00 ₹60,000.00
SC/ST farmers 33.33 ₹80,000.00
Stationery Others 25.00 ₹45,000.00
SC/ST farmers 33.33 ₹60,000.00

The funding pattern would be as follows –

  • Entrepreneur contribution – Minimum 10%of the outlay
  • Back ended subsidy – as mentioned in the above table
  • Effective bank loan – Balance portion, minimum 40% of the outlay

Eligibility Criteria:

What is the eligibility criteria for this scheme?

The eligibility criteria for this scheme is as follows:

  • Farmers, individual entrepreneurs, NGOs, companies, groups of the unorganised and organised sector (self-help groups, dairy cooperative societies, milk unions, milk federations etc.)
  • More than one member of a family can be assisted under the scheme, provided they set up separate units with separate infrastructure at different locations. The distance between the boundaries of two such farms should be at least 500m.

Application:

How can a beneficiary apply for this scheme?

The beneficiary needs to apply to the bank for sanctioning of the project.

List of eligible financial institutions where the beneficiary can apply for the subsidy is listed below:

  • Commercial Banks
  • Regional Rural Banks
  • State Cooperative Banks
  • State Cooperative Agriculture and Rural Development Banks
  • Such other institutions, which are eligible for refinance from NABARD

An individual can avail assistance for all the components under the scheme but can apply only once for    each component

For the application form, please click here.

For more information about this scheme, kindly click here.

Scheme for Fast Track Exit Mode

Organisations sometimes show no business activity or operation for a year or more of their establishment. At such times they choose to strike their name off from the official records of the Ministry of Corporate Affairs (MCA). If you’re an MSME who wishes to do the same, the Fast Track Exit Mode scheme introduced by the MCA can benefit you.

Overview:

The Fast Track Exit Mode Scheme by the MCA enables an MSME to close down their non-operational business at a cheaper cost with fewer formalities under Section 560.

Benefits:

How does an institution benefit from this scheme?

An institution can:

  • Avail loans to close down its non-operational business at an affordable price
  • Gain assistance from the government to:

– Build intermediary institutions

– Manufacture new products

– Identify target markets

– Meet its training needs

  • Gain assistance from the government in the fields of:

-Technology

-Marketing

Features:

What are the features of this scheme?

  1. Arranging fixed deposits for MFIs/NGOs

The Government of India provides funds to SIDBI. These funds are used for the security deposit requirement of loan for MFIs/NGOs. SIDBI takes 10% as security deposit, out of which MFIs/NGOs get 2.5% (25% security deposit). The institutions can avail further loans on the basis of security deposit.

  1. Training and Studies on Micro-Finance Program

The Government of India would help SIDBI in meeting the training needs of NGOs, Self Help Groups, intermediaries and entrepreneurs and also in enhancing awareness about the program. This would be performed with the help of various developmental institutes.

  1. Assistance in building conciliatory institutions

The government of India will help in building intermediary institutions for MFIs that will help them with building new products, identifying target markets, and providing technical and marketing assistance.

Eligibility Criteria:

What is the eligibility criteria for this scheme?

An MSME is eligible for this scheme if it falls under the following categories:

  • The company is not operating or is not carrying any business since the last one year from the date of application
  • Company is not operating or not carrying out any business since its incorporation
  • The company has no assets and liabilities
  • The company’s status should be ‘active’ or ‘dormant’ on the MCA portal

What makes an MSME ineligible for this scheme?

An MSME is ineligible for this scheme if it falls under the following categories:

  • Listed companies
  • De-listed companies due to non-compliance of Listing Agreement or any other statutory laws
  • Companies under Section 25
  • Vanishing companies
  • The companies against which an investigation or inspection has been ordered and yet to be taken up or pending
  • Companies where order u/s 234 has been issued by ROC and reply is pending
  • The companies where prosecution for a non-compoundable offence is pending in court
  • Companies which have accepted deposits which are outstanding or have defaulted in repayment
  • The companies having secured loan
  • Companies having management dispute
  • The companies for which filing of docs have been stayed by court or CLB or CG or any other competent authority
  • Companies having dues of income tax / sales tax / central excise / banks / financial institutions / CG / SG / other local authorities
  • The companies not having active / dormant status on MCA portal

Application:

How can an MSME apply for this scheme?

If your company is eligible to apply for this scheme, you will need to file the Form FTE with the Registrar of Companies (ROC).

The form must be filed online for a fee of ₹5,000, here.

Documents Required:

The documents required to apply for this scheme are:

  • Statement of accounts (duly signed by one MD / director / secretary and certified by auditor of the company or any other chartered accountant)
  • Copy of board resolution authorizing directors to file application
  • Indemnity bond duly notarized and signed by all directors
  • Affidavit duly notarized and signed by all directors (separately)
  • Physical Copy of e-form FTE duly signed by director / MD / manager / secretary if no DSC is available
  • Attested copy of PAN / passport (in case DIN is not available)
  • NOC from government (if applicable)
  • Any other optional attachment

For further details about this scheme, click here

EASY EXIT FILING SCHEME (EES)

Closing down a company is complex. Several formalities need to be taken care of before the venture’s name is officially struck off the Registrar of companies. The Easy Exit Filing Scheme provides companies with the assistance to combat such situations.

Overview:

The Easy Exit Filing Scheme makes easy and hassle-free work of closing down of a company. It also provides assistance in filing an application for loans, providing security or guarantee, etc.

Benefits:

What benefits does this scheme provide?

This scheme provides the following benefits:

  1. Hassle-free closing down process
  2. Easy application of loans
  3. More security/guarantee

Eligibility Criteria:

Who is eligible to apply for this scheme?

Any defunct company which has an ‘active’ status on the ministry’s portal is eligible to apply for this scheme.

Exclusions:

The companies that classify as exclusions to applying for the scheme are as follows:

  1. Companies who are carrying out business activity/operation on or after April 1, 2008
  2. Defunct company whose status is non-active on the MCA portal
  3. Listed companies
  4. Companies registered under Section 25
  5. Vanishing companies
  6. Companies against which an investigation or inspection has been ordered and yet to be taken up or pending
  7. The companies where order u/s 234 has been issued by ROC and reply is pending
  8. Companies where prosecution for a non-compoundable offence is pending in court
  9. The companies which have accepted deposits which are outstanding or have defaulted in repayment
  10. Companies having secured loan
  11. The companies having management dispute
  12. Companies for which filing of docs have been stayed by court or CLB or CG or any other competent authority
  13. The companies having dues of income tax / sales tax / central excise / banks / financial institutions / CG / SG / other local authorities

Application:

How can a firm apply for this scheme?

  1. A firm can apply for this scheme by clicking here
  2. The applicant is required to fill the form in the prescribed format along with the prescribed fee of ₹3,000
  3. Company should pass a board resolution for applying under Scheme and authorizing the signing director to file the application

Documents Required:

What are the documents required to apply for this scheme?

The documents required to apply for this scheme are:

  1. A certificate that states the Company is ‘true and correct’ is required by a Chartered Accountant or Company Secretary in practice
  2. The Director identification number or PAN number or Passport number attested by a Chartered Accountant or Company Secretary
  3. The application form digitally signed by the Director of the Company
  4. The position of balance sheet as on any date within 1 month preceding the date of filing of the application certified by the Chartered Accountant or Company Secretary. It has to be submitted separately, as Annexure “C”
  5. Affidavit in Annexure “A”

The affidavit needs the following attachments:

  • Copy of residential address proof (permanent/ present) attested by a Chartered Accountant/ Company Secretary or alternatively an affidavit sworn before a Magistrate
  • Statement of assets and liabilities
  1. Indemnity Bond as per Annexure ‘B’
  2. Statement of Accounts as per Annexure ‘C’

For more information on this scheme kindly click here

Deemed Exports Scheme

Every licensed exporter in India does not aspire to export ingenious goods to a foreign land. However, they do wish to receive the benefits enlisted for exporters who transport their goods abroad. This is where the Deemed Exports Scheme comes into the picture.

Overview:

The Deemed Exports Scheme aims to create a level playing field for the domestic industry vis-à-vis direct import by providing duty free inputs or exemption/refund of duty paid on goods manufactured in India.

Benefits:

How does an exporter benefit from this scheme?

An exporter can benefit from this scheme in the following ways:

  • Advance authorisation for annual requirement/DFIA Deemed Export Drawback
  • Exemption from terminal excise duty where supplies are made against ICB

Eligibility Criteria:

What is the eligibility criteria for this scheme?

All the licensed exporters* are eligible for this scheme.

*The following categories of supply of goods by the main/ sub-contractors shall be regarded as “Deemed Exports” under this Policy, provided the goods are manufactured in India:

(a) Supply of goods against Advance Licence / Advance Licence for annual requirement/DFRC under the Duty Exemption /Remission Scheme;

(b) Supply of goods to Export Oriented Units (EOUs) or Software Technology Parks (STPs) or Electronic Hardware Technology Parks (EHTPs) or Bio Technology Parks (BTP);

(c) Supply of capital goods to holders of licences under the Export Promotion Capital Goods (EPCG) scheme;

(d) Supply of goods to projects financed by multilateral or bilateral agencies/funds as notified by the Department of Economic Affairs, Ministry of Finance under International Competitive Bidding in accordance with the procedures of those agencies/ funds, where the legal agreements provide for tender evaluation without including the customs duty;

(e) Supply of capital goods, including in unassembled/ disassembled condition as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10% of the FOR value to fertilizer plants;

(f) Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty;

(g) Supply of goods to the power projects and refineries not covered in (f) above;

(h) Supply of marine freight containers by 100% EOU (Domestic freight containers-manufacturers) provided the said containers are exported out of India within 6 months or such further period as permitted by the customs;

(i) Supply to projects funded by UN agencies; and

(j) Supply of goods to nuclear power projects through competitive bidding as opposed to International Competitive Bidding.

Eligibility for refund of terminal excise duty/drawback:

  • The recipient of the goods does not avail CENVAT credit or rebate on goods.
  • If the CENVAT credit facility/rebate has not been availed by the applicant these supplies will however be eligible for deemed export drawback on the customs duty paid on the inputs/components.

Application:

How can an SME body apply for this scheme?

An SME body can apply for this scheme by clicking here

Documents Required:

What documents are required to apply for this scheme?

Click here to know about the documents required.

For further details on this scheme, click here.

Duty Exemption and Remission Schemes

Exporters often wish to explore new markets abroad for their goods. To compete with companies in the foreign market and to improve their manufacturing process, they need heavy duty machinery. One primary hindrance to this is the exaggerated custom duties required to pay to the government. This is where the Duty Exemption and Remission Scheme fits in.

Overview

The Duty Exemption and Remission Scheme assists you to receive waivers on custom duties on imported heavy duty machinery.

The schemes covered under Duty Exemption are:

  • Advance Authorisation Scheme
  • Duty Free Import Authorisation (DFIA) Scheme

The schemes covered under Duty Remission are:

  • Duty Entitlement Passbook (DEPB) scheme
  • Duty Drawback (DBK) scheme

Here are detailed points about each of the above-mentioned schemes.   

  1. Advance Authorisation Scheme: 

What does this scheme offer?

The scheme allows duty-free import of inputs which are utilised in the manufacturing process for organisations that import fuel, oil, energy and catalysts.

Imports under advance authorisation are exempted from payment of the following duties:

  • Basic customs duty
  • Additional customs duty
  • Education cess
  • Anti-dumping duty
  • Safeguard duty
  • Transition product specific safeguard duty

What is the eligibility criteria for this scheme?

The eligibility criteria for this scheme is:

  • Manufacturer, exporters or merchant exporters tied to supporting manufacturers
  • Advance authorisation shall be issued only to the manufacturer exporter for pharmaceutical products manufactured through non-infringing process.
  • The imported goods should provide minimum 15% value addition
  • The exports/imports need to be completed in 24 months

How can an organisation apply for this scheme?

An organisation can apply for this scheme in the following ways:

  • It will have to submit an online application with the prescribed documents to the concerned regional authority (RA).
  • The RA will then forward a copy of the application within 7 days from authorisation issue date to the Norms Committee (NC) for fixation of norms within the prescribed time.

The application form can be found on the following link

  1. Duty Free Import Authorisation (DFIA) Scheme 

What does this scheme offer?

For organisations that imports oil/catalyst utilised in the production, the DFIA scheme allows duty-free import.

DFIA only exempts from the payment of basic customs duty, unlike the advance authorisation scheme. Additional duties, including customs/excise, are not exempt under this scheme.

These duties are adjusted as CENVAT credit as per the Department of Revenue’s rules. DFIA is issued only for products with notified Standard Input and Output Norms (SION).

What is the eligibility criteria for this scheme?

The eligibility criteria for this scheme is as follows:

  • Merchant exporters and manufacturer exports are eligible to apply for this scheme
  • The imported goods should provide minimum 20% value addition
  • DFIA is exempted only from the payment of basic customs duty unlike the advance authorisation scheme
  • DFIA is issued only for products for which Standard Input and Output Norms (SION) have been notified

How can an organisation apply for this scheme?

An organisation can apply for this scheme by filling up the application form, attaching the necessary documents, and submitting it to the concerned RA.

The application form can be found on the following link

Please note, in respect of the following items, the exporter has to provide declaration with regards to the technical characteristics, quality and shipping bill. The RA will mention the technical characteristics, quality and specifications in respect of these inputs while issuing DFIA.

The items include – Alloy steel including stainless steel, copper alloy, synthetic rubber, bearings, solvent, perfumes/ essential oil/aromatic chemicals, surfactants, relevant fabrics, marble, articles made of polypropylene, articles made of paper and paper board, insecticides, lead ingots, zinc ingots, citric acid, relevant glass fibre reinforcement (glass fibre, chopped/stranded mat, roving woven surfacing mat), relevant synthetic resin (unsaturated polyester resin, epoxy resin, vinyl ester resin, hydroxyethyl cellulose), lining material.

Exclusions:

  • The merchant exporter availing this scheme has to mention the name and address of the supporting manufacturer of the product on the export document (shipping bill/airway bill/bill of export/ARE – 1/ARE – 3).
  • The application form should be filed with concerned regional authority before effecting export.
  • The export needs to be completed within 12 months from the date of online filing of application form and generation of file number.
  1. Duty Entitlement Passbook (DEPB) Scheme 

What does the scheme offer?

This scheme waives off customs duty on the import content of the export product. This is provided by way of grant of duty credit against the export product.

Under this scheme, an exporter can apply for credit as a specified percentage of freight on board (FOB) value of exports, made in freely convertible currency.

This scheme is valid for a period of 24 months from the date of issue.

Who is eligible to apply for this scheme?

Merchant exporters and manufacturer exports are eligible to apply for this scheme.

How to apply for this scheme?

An organisation can apply for this scheme by applying for a grant of credit under the DEPB scheme by submitting the application form to the concerned RA along with the prescribed documents.

An agency commission of up to 12% of FOB value will be allowed for DEPB entitlement.

The application form can be found online here. 

  1. Duty Drawback Scheme 

What does this scheme offer?

Under the Duty Drawback Scheme, the organisation will be reimbursed of the Customs and Central Excise Duties that it incur on its inputs. The amount is deposited it into the nominated bank account.

For further details on these schemes please click here