No. DPE-7(4)/2007-Fin
Government of India
Ministry of Heavy Industries & Public Enterprises
‘Department of Public Enterprises
Public Enterprise Bhawan
Block No. 14, CGO Complex
Lodhi Road, New Delhi- 110003
Date: 08.07.2020
OFFICE MEMORANDUM :
Subject: Prompt payment to suppliers including MSMEs: Charging of interest on delayed
payments in Government e-Marketplace (GeM)
‘The undersigned is directed to forward copy of D/o Expenditure OM No.
F.6/18/2019.PPD dated 03.07.2020, on the subject cited above, regarding charging of interest on
delayed payments in Government e-Marketplace (GeM) for information and compliance by the
CPSEs functioning under your administrative control
2. This
1es with the approval of competent authority. -
(Kalyani Mishra)
Director
Tel. 24362061
Enel.: As above
To
‘The Secretaries to the Administrative Mi
istries/Departments of CPSEs.
Copy for information to:
1. CMDsICEOs of all CPSEs
2. Sh. Kotlura Narayana Reddy, Deputy Secretary, Public Procurement Division, D/o
Expenditure, 512, Lok Nayak Bhawan, New Delhi, in respect of OM No.
F.6/18/2019,PPD dated 03.07.2020. No F.6/18/2019-PPD
Government of India
Ministry of Finance
Department of Expenditure
Procurement Policy Division
512, Lok Nayak Bhawan,
New Delhi Dated the 3rd July 2020
OFFICE MEMORANDUM
Subject: Prompt payment to suppliers including MSMEs: Charging of interest
on delayed payments in Government e-Marketplace (GoM)
Reference : This Department O.M. NoF /18/2019-PPD dated 23.01.2020
Government has been repeatedly emphasizing the need for prompt payment
to vendors ‘specially the MSME vendors. The intent of the Government in this regard
2) has been articulated under the Aatmanirbhar Bharat. pronouncements. For
7 9 procurements made under rule 4149 of GFRs 2017, buyers are mandated to make
+."
Consignee Receipt and Acceptance Certificate (CRAC) in the Gem
a
2. Imorder to promote greater discipline and timeliness in payment to vendors: it
© decided that whenever a CRAC is auto generated or issued by @ buyer and
payment is not made 10 days thereafter, the buyer organization will be required to
pay penal interest @ 1% per * onth for tne delayed payment beyond the prescribed
Fveline tl the date of such payment. The charge of interest shall be prorated for the
period of delay. [For example, if CRAC is generated on the 1" day of @ month and
payment is made by the buyer organization on the 20" day of the month, interest for
{0 days will be charged. The penal interest will be 10/30 multiplied by 1% be
0.33%]. Month may be taken as 30 days in all cases,
3. « The, amount collected in this regard shall be deposited in an account
toy) Mamuained by ea This interest will not be paid to the vendor and will be kept by
pat GeM in a separate account which will be used only for the ‘education of sellers!
—_ buyers etc., or other purposes related to ‘GeM or public procurement with the prior
approval of Department of Expenditure. This shall not cover any other interest
payable to vendors under any law or ure tractual obligations, which will be over and
above the interest as charged above.
4s
Wo
“{c\3)25© 4 The above conditions will be applicable for all procurements made from
October, 2020 ——
Obtober, 2029,
ae J 6. This issues with the approval of Finance Minister.
y 7
ve Ke’
5 (Kotluru Nar Reddy)
Q Kye” Deputy Secretary to the Govt. of India
Tel.No.24621305. Email: [email protected]
To,
All the Secretaries and Finaficial Advisers to Government of India bi
oO war
copy UN 20
1
‘Ga, CGDA,FCIRaiWay Board - For information and necetsst) action ro)
2. Secretary, Department of Public Enterprisos ‘with a request to consider issuing?
tw) appropriate instructions to Public Sector ‘Undertakings in this regara. ie
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