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A148 EXCISE LAW TIMES [ Vol. 372

District-Level Clearance Norms for MSME Scheme relaxed
for enterprises in rural, semi-rural areas

In a bid to speed up project implementation under the Prime Minister’s
Employment Generation Programme (PMEGP) when COVID-19 has impacted all
sectors, the Ministry of Micro, Small and Medium Enterprises has done away
with district-level approval systems and eased procedures to help fund enter-
prises.
Under PMEGP, loans of up to ` 25 lakh are given for manufacturing pro-
jects while as ` 10 lakh is given for the business and service sector. The Khadi
and Village Industries Commission (KVIC), which implements the programme,
subsidises 15% to 35% of a project’s cost, depending on the classification of the
area where the project has been proposed.
So far, the proposals were scrutinised by a district-level task force head-
ed by the District Collector. Since District Collectors are often busy with adminis-
trative duties, there had been considerable delays in sanctioning projects. KVIC
Chairman, Vinai Kumar Saxena took up the matter with MSME Minister Nitin
Gadkari earlier this month. In light of the impact of the pandemic on employ-
ment and entrepreneurship, Gadkari is said to have considered the matter on
priority and approved a simplified procedure this week.
According to the amended guidelines issued on April 28, the KVIC will
now directly clear the proposals and applications of prospective entrepreneurs
and forward them to banks for taking credit decisions.
The MSME Ministry issued a notification that said the role of the district-
level task force “as constituted under Clause 11.9 of the Scheme guidelines, may
be discontinued for recommendation of proposals/applications to the financing
banks.” All pending applications have been moved out of the task force’s pur-
view and sent ahead to banks for processing them.
The Ministry also ordered that all PMEGP applications presently pend-
ing at the task force level “may also be withdrawn by the implementing agencies
and forwarded to the banks immediately for taking credit decisions.”
The KVIC, in association with the Bankers Association of India, will also
develop a scoring sheet that will be uploaded on the PMEGP E-portal to allow
applicants to check the status of their applications, making the process transpar-
ent.
[Source : The Economic Times, New Delhi, dated 2-5-2020]

No GST on full-time Directors’ salary : AAR
The controversy on whether remuneration paid to Directors of a compa-
ny is subject to the Goods and Services Tax (GST) has been put to rest by a recent
decision of the Authority for Advance Rulings (AAR), Karnataka Bench.
Anil Kumar Agrawal, who had received salary as a Director from a pri-
vate company, had approached the Bench. In its order dated May 4, the AAR
Bench has clarified that if the Director is an employee of the company, there will
be no incidence of GST. However, if the Director is a Non-Executive Director
(that is, a nominated Director), and provides his or her services to the company,
EXCISE LAW TIMES  15th May 2020  56