Introduction
The Government e-Marketplace (GeM) is a revolutionary initiative by the Government of India to facilitate seamless procurement of goods and services by various government departments and organizations. As GeM evolves, certain policy updates are made to ensure the platform’s efficiency, sustainability, and fairness to all stakeholders. One such recent update is the introduction of the revised Annual Milestone Charges (AMC) and Transaction Charges policy, effective from August 9, 2024.
This guide is crafted especially for sellers on the GeM platform to help them understand the updated policy in simple terms and prepare for smooth compliance.
What Is the AMC and Transaction Charge Policy All About?
The AMC and transaction charge policy on GeM outlines the fees sellers need to pay for using the platform’s services. This policy ensures that GeM can maintain and improve its digital infrastructure, offer better services, and provide a fair opportunity for sellers and buyers alike.
Why This Policy Matters to You as a Seller
Being aware of these charges helps you plan your pricing, budget your operations, and stay compliant. Ignorance of these policies may lead to unforeseen deductions or account suspension.
Applicable Transaction Charges & Annual Milestone Charges
a) Sellers reaching a cumulative Seller Merchandise Value (SMV) of Rs. 20 lakh within a financial year will be required to pay a one-time Annual Milestone Charge of Rs. 10,000 plus applicable taxes.
b) The Seller Merchandise Value (SMV) is defined as the progressive sum of all order values received by a seller during a given financial year.
c) The Annual Milestone Charge becomes payable automatically once the Rs. 20 lakh threshold is reached and is deducted at that point.
d) Once the seller crosses this Rs. 20 lakh threshold, Transaction Charges are also levied as follows:
| Order Value (INR) | Transaction Charges (exclusive of taxes) |
|---|---|
| More than Rs. 10 lakh and < Rs. 10 crore | 0.30% of the order value |
| Rs. 10 crore and above | Flat fee of Rs. 3,00,000 |
e) Sellers are not required to pay Transaction Charges under these circumstances:
- If the order value is Rs. 10 lakh or less.
- If the order was placed before the seller reached Rs. 20 lakh in SMV.
f) The date the order or contract is placed will be considered for calculating SMV.
g) This revised revenue model is applicable for all bids with a bid opening date on or after August 9, 2024.
Payment of Transaction Charges and AMC
a) Sellers become liable to pay both Transaction Charges and the Annual Milestone Charge (if applicable) once a contract is awarded to them by a Buyer through the GeM portal.
b) Sellers can generate the invoice for these charges within 5 days from the date of contract award by selecting the appropriate GSTN. If not generated within this period, GeM will auto-generate the invoice using the seller’s default GSTN.
c) The seller must ensure payment of applicable charges based on the earliest of the following events:
- Within 15 days from the contract award date on the GeM portal.
- Before raising the first invoice to the buyer on GeM.
- On or before the due date of the first delivery as per contract terms.
Whichever of these occurs first will trigger the payment obligation.
d) All charges are subject to applicable taxes (like GST). Each financial year is treated as an independent accounting unit and is not transferable.
e) If a seller fails to pay the required charges within the stipulated period, penalties may apply under GeM’s Incident Management Policy. The seller’s account may be deactivated and reactivated only after clearing the dues.
Refund of Transaction Charges in Case of Contract Termination
a) Sellers may request a refund of Transaction Charges if a contract is terminated by the buyer under specific circumstances:
- Incorrect product/service selection by the buyer.
- Order was placed in error.
- Product/service is partially or no longer required.
- The buyer or consignee is not available to receive the delivery.
b) In cases of partial requirement, refunds may be granted on a pro-rata basis, provided other refund criteria are satisfied.
c) Refunds are only applicable if the contract is terminated or amended within 6 months from the award date.
d) Sellers must submit refund claims within 90 days of contract termination. Any applicable refund will be adjusted after deducting GeM dues, if any.
e) No refund will be given if the termination is due to seller’s failure to meet contractual obligations, or if any false/misleading information was provided by the seller.
How to Track Your Charges
GeM provides a dashboard where sellers can monitor their order values, applicable charges, and any deductions made. It’s important to check this dashboard regularly to stay updated.
How These Charges Benefit Sellers
While charges may seem like an added cost, they contribute to:
- Better system upgrades
- Efficient grievance redressal
- More visibility and buyer reach
- Enhanced logistics and tracking systems
These developments eventually help sellers grow their business more effectively on the platform.
Best Practices for Sellers
- Factor in Charges in Your Pricing:
Include AMC and transaction charges while pricing your product or services to avoid losses. - Stay Updated:
Policies can change. Keep an eye on GeM circulars and updates. - Utilize Support Channels:
If you’re confused about a charge, reach out to GeM’s seller support. - Review Dashboards:
Check your order value and deductions regularly to avoid surprises.
How to Pay the AMC
Once your order value crosses Rs. 20 lakh in a financial year, GeM will notify you of the AMC. You’ll receive a payment link or an option in your seller dashboard to make the payment. Failure to pay within the stipulated time may lead to temporary suspension of services.
Understanding the Bigger Picture
These charges are not arbitrary. They are part of a well-thought-out model to make the GeM platform more efficient, scalable, and beneficial for both sellers and buyers. The aim is to make public procurement more transparent, streamlined, and inclusive.
Conclusion
The updated Annual Milestone and Transaction Charge policy on GeM, effective from August 9, 2024, is designed to ensure that the platform remains a reliable and robust marketplace for all government procurement. As a seller, understanding and adapting to these charges will not only help you remain compliant but also empower you to make informed decisions, grow your business, and leverage the full potential of GeM.
Make sure to regularly check the official GeM portal for the latest notifications and stay engaged with the platform’s helpdesk for any assistance.
FAQs
- What happens if I don’t pay the AMC or Transaction Charges?
Your account may be suspended and resumed only after pending payments are cleared. - Are these charges refundable?
Transaction Charges may be refundable under certain conditions; AMC is non-refundable. - Will I be notified before charges are applied?
Yes, GeM sends out notifications through your seller dashboard and registered email. - Can I raise a dispute about a wrong deduction?
Yes, you can raise a ticket through the seller support section. - Are these charges applicable to service providers as well?
Yes, the policy applies to both product sellers and service providers registered on GeM.
