Payment procedure Rule for sellers on GeM - Legal Salaah
Hemlata Khandenwal / 2020-03-04 11:51:44

As we all know, there is a payment in every work and the government makes a lot of rules and laws for the payment and every company has its contract and rules, in the same way, it also has some rules and contracts based on which Sellers are paid In pursuance of Rule No. 149 of GFR 2017, the following procedures are laid down for payment to vendors/service providers in GeM. Whose compliance and adhere is done for different types of contracts. Such as:

A) Supply of Goods and Services
B) Supply, installation, testing, and commissioning of goods
C) Supply, installation, testing, commissioning, and training of goods

Required to provide operators and statutory clearances (if any)

There have some contractual rules related to the procedure of payments to Sellers on GeM which are as follows:

1. Contracts for the supply of goods:

In respect of a contract for the supply of goods, 100% payment including GST is required to be made after receipt and acceptance of goods and subject to recovery of "goods CRAC" (acceptance certificate of goods and receipts), if any. Short supply and liquidation losses for supply delays, etc.).

2. Contracts for Services:

In respect of services contracts, payment should be made according to the periodicity fixed in the contract i.e. on monthly, quarterly or any other pre-milestone payment period. For special payment cycles 100% payment including GST should be made after receipts and "Service CRAG" (Consensus Receipt and Acceptance Certificate)if any, either on account of short supply, SLA (Service Level Agreement) deviations and Liquidated Damages for the delay in supply, etc.

3. The Contract for the Supply, installation, testing.

In respect of contracts for the supply, installation, testing, commissioning of goods and training of operators, etc., the entire cost indicating GST, installation and commissioning fees, contingency services, training, etc. are indicated separately. In dialect. To meet the installation of intensive products, various configurable payments Milestones are incorporated into GeM functionalities (depending on the volume of installation and turnkey work).

(A) First Milestone-

On delivery of goods: 

100% GST on the price of the goods as well as 90 to 90% payment of the original price of the goods (less initial payment if the scope of installation is too wide) but installation, receipt goods. And other fees will be paid after the generation of "initial payment for delivery CRAC", excluding trials and commissions. It is issued only after physical verification of quantity, but without commitment about quality or functionality, which will be verified after installation/commissioning, etc. The buyer will have the functionality to define the percentage of payment associated with good delivery.

(B) Second Milestone-

On Installation, After Test Approval and Commissioning: 

GeM seller registration is necessary to become a seller on GeM after that for the sellers Balance 10% to 20% Payment of Principal 100% fee for the price and installation of the goods, and testing, commission and other charges with GST on these charges will be paid after final acceptance and the goods and payment of "Installation CRAC" issued by the end-user / consign. Payment will be made. And the recovery due to short supply and/or liquidation loss etc., if any, for the delay in supply, / or installation, is paid under this milestone. And will be received. When bidding, the purchaser will have the functionality to define deliverables in this milestone and the percentage of payments associated with this milestone.

(c) Third (and later), Milestone-

Contingent payment Cost: 

100% payment related to contingency costs at the consignee site towards interdisciplinary services (such as providing training, or other work/service according to the scope set out in the contract) will be paid by the end bank upon submission of the "final CRAC". Consignee when making a bid, the purchaser will have the functionality to define the deliverables at this milestone. In exceptional cases, the purchaser may choose to split this milestone as necessary.

Note: Every seller or buyer on GeM needs GeM Registration. If you do not have registration or you want to get benefits on GeM then get register on GeM through Legalsalaah or visit our website

4. In case of a contract of supply, installation, testing, commissioning of goods bundling with one or more services, such as Comprehensive maintenance, hiring human resources for the pre-defined time, etc. Payment for goods will be governed by Para 4 above, While the payment for services will be governed as per para 3 above.

5. In the case of Milestone-based payment, different timelines/delivery periods will be provided for each milestone. In the case of supply and installation contracts, the delivery period can be specified by filling in as follows:

(A) First milestone-

For delivery of goods on site: Day/month from the date of issue of a contract with the provision of staggered / multiple delivery periods for a single shipment.

(B) Second Milestone-

Installation, testing, and, commissioning, etc., of goods: 
Day/month from the date of handing the site complete as per the contract.

C) Third (and later) milestones-

Contingency services etc. Days after installation and commissioning.

6. Payments on GeM are mainly classified under two heads, namely through PFMS or GeM Pool account.

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