Government e-Marketplace Sellers have to pay Transaction Charges

The Government has recently notified that all the sellers having GeM registration have to pay the GeM transaction charges applicable on the order placed, within 10 days from the date of placement of the contract.

The Government e-Marketplace, more commonly known as GeM is undoubtedly a very user-friendly and transparent platform set up for enabling the Medium & small enterprises (MSEs) and manufacturers of India.

A small scale trader or manufacturer can easily access the Government e-Marketplace by easily obtaining the GeM registration in the name of his business entity. Thereafter, he can get easy access to the extensive platform for dealing in the products & services with distinguished buyers from the Government department or the PSUs, where there is an urgent requirement of such goods and services.

1. What are the GeM transaction charges?

The GeM transaction charges are the charges that are applicable on the order placed to the GeM registered sellers and have to be paid by them. 

The buying & selling of the goods and services generally takes place on the GeM portal through a process called public procurement. In this process, the central, state governments and PSUs place the tender to the buy goods & services from the private traders and manufacturers. In common language, this is called government tender. The government levies a certain charge out of the transaction value, known as transaction charges.

2. What has Government said regarding transaction charges?

The government has recently given a notification stating that all the sellers having GeM registration have to pay the GeM transaction charges applicable on the order placed to them, within 10 days from the date of placement of the contract.

With respect to all the contracts placed on the GeM portal after 15th December 2019, if the seller fails to pay the transaction charges within 10 days from the date of placement of the contract, his contract shall be canceled and the seller shall be liable for penal action. The notification is shown as below-

3. How much transaction charge is levied on sellers?

GeM provides a user-friendly platform for both buyers & sellers to carry out the transactions. Hence the buyers & sellers having GeM registration are charged a very nominal percentage of the transaction value of their order as transaction fee. 

• Besides, the GeM department charges a transaction fee only above a certain threshold limit of the transaction value.
• Along these lines, if the transaction value of the order is above ₹30 lacs, the Sellers are charged 0.5% of the total transaction value.
• This has been designed in accordance with the proviso that the user's willingness to pay can be higher in case of transactions of the bigger value. This also ensures a higher possibility of implementation and greater revenue realization for GeM.

The sellers are advised to timely pay the transaction fees in order to avoid cancellation of their orders and other penal actions.

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