Buyers to pay interest for late payment on GeM portal – Times of India

NEW DELHI: The authorities division and companies, procuring items and providers from authorities e-market (GeM) platform, may have to pay one per cent interest on late funds made to distributors, in accordance to the division of expenditure.
However, the interest quantity will likely be deposited in an account maintained by GeM.
The authorities has been repeatedly emphasising the necessity for immediate payment to distributors specifically the MSME distributors.
For procurement made on (GeM), patrons are mandated to make funds inside 10 calendar days after technology (together with auto technology) of consignee receipt and acceptance certificates (CRAC) on the GeM.
“In order to promote greater discipline and timeliness in payment to vendors, it is decided that whenever a CRAC is auto generated or issued by a buyer and payment is not made 10 days thereafter, the buyer organisation will be required to pay penal interest @1 per cent per month for the delayed payment beyond the prescribed timeline till the date of such payment,” it mentioned.
The cost of interest will likely be prorated for the interval of delay. For instance, if CRAC is generated on the primary day of a month and payment is made by the client organisation on the 20th day of the month, interest for 10 days will likely be charged.The penal interest will likely be 10/30 multiplied by 1 per cent i.e. 0.33 per cent. It added that month could also be taken as 30 days in all instances.
Further, the division in an workplace memorandum mentioned that the quantity collected on this regard will likely be deposited in an account maintained by GeM.
“This interest will not be paid to the vendor and will be kept by GeM in a separate account which will be used only for the education of sellers/buyers or other purposes related to GeM of public procurement with the prior approval of the department of expenditure,” it added.
The situations will likely be relevant for all procurement constructed from October 1 this 12 months.
The workplace of finance minister Nirmal Sitharaman tweeted “in order to promote greater discipline and timeliness in payment to vendors, especially #MSMEs, the government has issued an order to levy interest on late payment to vendors on the government e-marketplace”.

GeM, launched by the commerce ministry in August 2016, is the nationwide public procurement portal for an internet, end-to-end market for open, environment friendly and clear procurement of items and providers by central and state authorities organisations.
Currently, authorities departments, ministries, public sector items, state governments, and Central Armed Police Forces are allowed to perform transactions by means of this portal.
The portal gives a variety of merchandise from workplace stationery to automobiles. Automobiles, computer systems and workplace furnishings are presently the highest product classes. Services, together with transportation, logistics, waste administration, net casting and analytical, are listed on the portal.
So far, 4,02,353 sellers and repair suppliers are registered with the portal to promote 18,78,404 services and products.