Interest to be charged on delayed payments to vendors on GeM

New Delhi [India], July 4 (ANI): In a bid to promote discipline and promptness in payment, the Centre has taken a step to charge interest on delayed payments to vendors on Government e-Marketplace (GeM) which will especially benefit the MSME vendors and help them in becoming self-reliant.
"For procurements made under rule 149 of GFRs 2017, buyers are mandated to make payments within 10 calendar days after generation (including auto-generation) of consignee receipt and acceptance certificate (CRAC) in the GeM," a memorandum issued by the Ministry of Finance read.
"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 organization will be required to pay penal interest at 1 per cent per month for the delayed payment beyond the prescribed timeline till the date of such payment," it added.
The above change will come into effect from October 1, 2020.
The charge of the interest shall be prorated for the period of delay, according to the memorandum.
The amount collected through this will be deposited in a separate account maintained by the GeM and will be used for the education of sellers, buyers, or for other purposes related to GeM or public procurement with the prior approval of the Department of Expenditure. (ANI)