prpri Basics of GeM (Government e-Marketplace) Basics of GeM (Government e-Marketplace)

After its launch in October 2016, there are nearly 2,186,362 sellers and service providers that have already registered on GeM. Not only this but the transaction value on GeM has crossed the milestone of ₹ 1,000,00 Crore till the date of writing this article. 

Isn’t it interesting?

What is GeM?

With a motive to enhance transparency and efficiency in the public procurement of Goods & Services for Government Organizations and Departments, the GOI has introduced a digital e-commerce portal named GeM. It was created in a time of 5 months to facilitate online procurement of Goods & Services. The purchases through GeM by Government users have been authorized and made mandatory by the Ministry of Finance by adding a new Rule No. 149 in the General Financial Rules, 2017.

How to avail GeM facilities?

GeM could be a  very good opportunity for all those Indian Sellers/vendors who want to seek growth in their business and deal with the government organizations directly. Before proceeding with discussing the benefits of GeM with you all, there needs to be a registration completed on GeM in order to either avail/procure services on GeM or offer your own services/goods on it. Since availing and offering are two different things, so that concludes us with the two options of registration i.e. Buyer and Seller Registration on GeM. The overall process of registration for both buyer and seller is different. I will cover that in another article.

Benefits of GeM

I don’t think there is any need to mention why any seller/buyer should register themselves on the portal. But indeed for securing your decision completely of using GeM portal. Here are some of the key advantages of the GeM portal that it offers.

1. Offers rich listing of products for individual categories of goods/services.

2. Direct purchase for amounts up to ₹ 25000.

3. L1 purchase for amounts greater than ₹ 25000 and less than ₹ 5 Lakhs.

4. Price Trends and Price Comparison From Multiple Suppliers.

5. Integrated Payment System.

6. Special provisions and sections for startups, MSMEs, and Emporium products.

7. Direct access to Government departments and their organizations.

8. Multiple invoices for single order.

9. Online grievance redressal mechanism for a quick resolution.

10. Delivery period up to 180 days.

However, there are a whole bunch of such benefits mentioned on the Government site but I have picked only practical benefits that any buyer or seller would enjoy on GeM.

Government Fee for GeM Portal

To be clear, there is no Registration fee on GeM, whether as a seller or buyer. But caution money deposits come into play when a seller registers in the GeM portal. This caution/security is needed to be deposited which can be refunded completely.

The caution money for sellers depends on the annual turnover of their business. For instance, a seller with a turnover of less than ₹ 1 Crore needs to pay ₹ 5000 as security/caution money, and a seller with over ₹  10 crore turnover needs to pay 25,000 for the same. 

There is an additional Vendor Assessment charge for all those vendors/OEMs i.e. ₹ 11,200 excluding GST.

Unique Features of GeM

GeM comes with a lot of unique and new features that no other e-commerce portal ever came with. As I have mentioned above in the benefits are also about direct purchase, e-bidding, L1 Comparison, and others. It is time to explain some of them now:

Reverse Auction/e-Bidding: A reverse auction (also known as buyer-determined auction or procurement auction) is a type of auction in which the traditional roles of buyer and seller are reversed. Thus, there is one buyer and many potential sellers. In an ordinary auction also known as a forward auction, buyers compete to obtain goods or services by offering increasingly higher prices. In contrast, in a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers underbid each other.

L1 Comparison and Direct Purchase: When the purchase amount is more than Rs 50, 000, it is mandatory to do a comparison of the products first and the buyer needs to select the L1 product. For mid-value transactions, the Direct Purchase with the L1 mode is authorized, allowing the buyer to directly acquire from the L1 seller after analyzing all available sellers on the platform who satisfy the buyer’s needed quality, specification, and delivery period. A comparison of goods/services from at least three separate manufacturers/OEMs and three distinct retailers is required.

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Understanding these new concepts and registrations could be tougher also. I myself have to do deep research on it to understand it completely. But to your benefit, there are some GeM consultants like Professional Utilities that can guide you in the GeM Registrations process and all other related things too. You can directly contact them through their website www.professionalutilities.com or call them on 9716711090.

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