In this article, Arunava Bandyopadhyay pursuing M.A, in Business Law from NUJS, Kolkata discusses how to Participate in Government e-Market (GeM) as a Seller.
“The Government is committed to curbing corruption. One of the key aspects of this objective is to minimize Government’s human transactional interface. Accordingly, public procurement is being transformed by leveraging technology such as online marketplaces and e-tendering. The Government E-marketplace (GeM) also offers other advantages such as minimizing prices while maximizing ease, efficiency and transparency. It will help enhance processes in ways such as demand aggregation, real-time price discovery, and prompt automated payments.” – Shri Narendra Modi, Prime Minister of India.
The above quote of the Hon’ble Prime Minister of India summarizes the whole objective of the Government of India noble Initiative to bring in transparency and curb corruption. Public procurement forms a very important part of Government’s work and as such it involves significant amount of money and goods transaction. The bureaucratic ways of Government processes led to various loopholes and ultimately the cancer of corruption has eaten up a big amount of government’s exchequer. To curb this corruption and bring transparency and efficiency reform in Public Procurement is one of the top priorities of the Indian Government. Government e-Marketplace (GeM) is an exceptionally intense stride of the Government with the hope to change the way in which acquisition of merchandise and ventures are executed by the Government Ministries/Departments, PSUs, Autonomous bodies and so on. This initiative expects to upgrade straightforwardness, effectiveness and speed in public procurement. It gives the instruments of e-bidding, reverse e-auction and demand aggregation to encourage the government users to accomplish the best incentive for their cash. In short, it is government’s initiative for Procurement made smart.
Background of Government e-Marketplace
The Government e-Marketplace initiative owes its beginning to the proposals of two Groups of Secretaries made to the Hon’ble Prime Minister in January 2016. They suggested setting up of a devoted e-market for various products and services procured/sold by Government/PSUs other than improving DGS&D. Along these lines, the Hon’ble FM in his Budget discourse for FY 2016-17, declared setting up of an innovation driven stage to encourage procurement of products and services by different Ministries and offices of the Government. DGS&D with expert help of NeGD (MeitY) has created GeM portal for procurement of both Products and Services. The portal was launched on 09th August 2016 by the Hon’ble Commerce and Industry Minister. Procurement on GeM has been approved by GFR by including Rule 141A (DoE OM dated third May 2016). Presently more than 7400 products in about 150 product categories and hiring of transport service are available on GeM POC portal. Transactions for more than Rs 140 Crore have already been processed through GeM. It is a totally paperless, cashless and framework driven e-commercial center that empowers acquisition of regular use merchandise and services with negligible human interface.
Benefits of GeM
Government e-Market place has several benefits to the Government, Sellers and Indian Industry and economy. Let us explore the benefits for different stakeholders:
- Offers rich posting of items for singular classes of Goods/Services
- Makes accessible hunt, think about, select and purchase facility
- Empowers purchasing Goods and Services on the web, as and when required.
- Gives straightforwardness and simplicity of purchasing
5.Guarantees ceaseless merchant rating framework
- Progressive easy to understand dashboard for purchasing, checking supplies and payments
- Arrangement of simple merchandise exchange
- Accessibility to all Government offices in one go
- One-stop search for showcasing with insignificant endeavors
- One-stop search for offers/reverse auction on items/services
- New Product Suggestion facility accessible to Sellers
- Dynamic pricing: Price can be changed based on market conditions
- Seller cordial dashboard for offering, and checking of supplies and payments
- Consistent and uniform purchase procedures
Common Benefits to all Stakeholders
GeM disposes of human interface in seller enlistment, arrange position and installment preparing, all things considered. Being an open platform, GeM offers no entry barriers to bonafide suppliers who wish to do business with the Government. At each progression, SMS and email notices are sent to both purchasers, his/her head of association, paying specialists and additionally merchants. On the web, cashless and time bound installment on GeM is encouraged through combination with PFMS and State Bank Multi Option System (SBMOPS); web-administrations incorporation is being stretched out to installment frameworks of Railways, Defense, major PSUs and State Governments. Seamless processes and online time-bound payment, which is also mandated by the OM issued by Department of Expenditure, has given confidence to the sellers and reduced their ‘administrative’ cost involved in pursuing officers for timely payment.
Coordinate buy on GeM should be possible in a matter of minutes and the whole procedure in on the web, end to end incorporated and with online instruments for evaluating value sensibility. For acquirements of higher value, the offering/RA office on GeM is among the most straightforward and proficient, in contrast with e-acquisition frameworks in vogue inside the Government segment. For making an offer/RA, the purchaser does not have to make his/her own particular specialized details as they have been institutionalized on GeM. The offer/RA can be made in a matter of minutes and concluded inside at least 7 days. The offer/RA is advised by means of email and SMS to all the qualified providers; new providers are additionally told once they get themselves enrolled online on GeM and are resolved as “qualified” by the framework. Diamond offering/RA along these lines guarantees rivalry, reasonable play, speed and effectiveness and prompts appropriate value disclosure. The sensibility of the rates can likewise be affirmed through online correlation with advertise cost on driving internet business entryways. Soon, GeM will likewise begin getting nourishes from different other open acquisition gateways keeping in mind the end goal to guarantee that a similar thing has not been obtained at a lesser rate by some other Government office, from the same or an alternate seller.The sensibility of cost would be additionally fortified by method for incorporation with GSTN and ICEGATE that will empower the purchaser to find out the cost of a thing when it left the plant entryway or when it got transported in into the nation. These would make GeM a greatly capable device in the hands of Government associations to arrange and obtain.
Secure and Safe
GeM is a totally secure platform and every one of the archives on GeM are e-Signed at different stages by the purchasers and dealers. The predecessors of the providers are confirmed on the web and naturally through MCA21, Aadhar and PAN databases. What’s more, SEBI empaneled FICO assessment offices are likewise being utilized for directing third party appraisal of providers. This would additionally reinforce due diligence about the veracity of providers planning to work together on GeM. For high value bids/RA on GeM, an e-Bank Guarantee is likewise being presented.
GeM is an obviously better framework than the current one which depends more on money related instruments (EMD if there should be an occurrence of tenders for extensive acquirements just) to ensure great lead by the providers. In the current framework, there is zero keep an eye on the predecessors of the providers for little value acquirements (upto Rs. 1 lakh) whose total value is huge across the Government organizations. GeM does a 100% online check of all sellers independent of the estimation of procurement.
Potential to Support Make in India
On GeM, the channels for choosing merchandise which are Preferential Market Access (PMA) consistent and those produced by Small Scale Industries (SSI), empowers the Government purchasers to acquire Make in India and SSI products effectively. Effortlessly available MIS additionally empowers the executives and arrangement creators to effectively and adequately authorize the Government directions on PMA and SSI sourcing.
Savings to the Government
The straightforwardness, effectiveness and convenience of the GeM portal has brought about a significant diminishment in costs on GeM, in contrast with the delicate, Rate Contract and direct buy rates. The normal costs on GeM are bringing down by at least 15-20%, and now and again even upto 56%. Jewel is additionally doing Demand Aggregation for things that are to be secured by different Central/State Government Departments. Request Aggregation is relied upon to additionally minimize the costs, by method for institutionalization of details and economy of scale. Request conglomeration for the greater part of the basic utilize products and services is evaluated to bring about yearly funds to the tune of Rs 40,000 Crore per annum. On the off chance that sought after to its coherent decision, GeM would, in the end, rise as the National Public Procurement Portal, keeping tuned in to the Global accepted procedures; the greater part of the OECD nations, similar to USA, South Korea, UK, Singapore and so on, have a single NPPP and as a result annual savings of billions of dollars are made in public procurement, besides giving a fillip to the domestic industry.
How to Start Business as a Seller on GeM
As General Financial Rules, On GeM, for purchases upto Rs.50,000/-, “Purchaser (s)/Buyer(s)” are authorized to source required items through any of the available sellers on the GeM meeting requisite quality, specifications and delivery period. However, for purchases above Rs. 50,000/-, “Purchaser (s)/Buyer(s)” are authorized to source required items through the supplier having lowest price amongst the available suppliers on the GeM meeting requisite quality, specifications and delivery period. Aforesaid, powers have been vested in the Government user departments so that they can meet their requirement of common user goods and services with the flexibility and speed of e-market place and relieve them from repeated mundane activity of bid management. The primary registration to the government users is granted at the level of Deputy Secretary/equivalent officer in respective government departments.
The terms “Sellers” or “Sellers” has been defined as the firm(s) a proprietorship/partnership firm/Limited Liability Partnership/Private Limited/Limited company/Society registered under Society’s Act that offers its Good(s)/Service(s) on GeM and agree to accept the contract placed by “Buyer(s)” for supply of the Good(s)/Service(s) as per the terms and conditions of GeM. The Sellers on GeM will be the OEMs (Original Equipment Manufacturers) and/or their authorized channel partner(s)/ resellers (having any general authorization/dealership of the OEM to sell their product in open market) and e- Marketplaces.
The Steps for Starting Selling on GeM Portal are broadly as follows
1. Business Registration
The firm willing to sell on GeM portal or generally starting a legal business model would require to incorporate a new Private Limited Company or LLP, if required.
2. Tax Registration
Aadhar, PAN, GSTN registration numbers needs to be obtained.
3. Bank Account Link
A Bank account needs to be opened and registered with name of the business firm.
4. GeM Registration
GeM Seller or service provider registration to be completed by registering online and providing required information and documents.
5. E-Sign Terms and Conditions
After all requisite forms are filled up, GeM terms and conditions needs to be e-signed.
Learn selling on GeM portal, usage of GeM Dashboard and procedures.
7. Begin Selling
Now let us look into details of the Seller registration process and documentation required:
The following documents are required for Seller Registration:
- PAN CARD
- UDYOG ADHAR or COMPANY REGISTRATION or LLP REQUIREMENTS
- VAT/ TIN NUMBER (of applicable)
- BANK ACCOUNT & SUPPORTING KYC DOCUMENT
- IDENTITY PROOF
- ADDRESS PROOF
- CANCELLED CHEQUE COPY
The Following links are applicable for Online Registration as Seller / Service Provider
After registration, the firm will be issued a userID and password from GeM portal to access the seller account. Afterwards, the listing & pricing of the products or services are done which are to be offered. The sellers have freedom of pricing the product as per the cost involved. But the final price should include the costs like cost of logistics, duties, packing & taxes, etc. along with a reasonable margin to arrive at the selling price on all-inclusive basis- indicating percentage of GST, as applicable at site basis. Once registration and listing is complete, the products of the seller are visible to the buyer and orders can be placed. If any order is placed the seller will find it in its dashboard and the GeM portal will also send an email alert to sellers registered email id.Buyer shall award the digitally signed/e-signed on-line Contract(s) in the GeM after due diligence to meet their requirements including the requisite specification and delivery period. The Buyer shall satisfy them that the price of the selected offer is reasonable. In case of Services, the agreed SLA (Service Level Agreement) would also constitute the integral part of the Contract(s). For award of Contract(s), Buyer is at liberty to utilize all the data/information and tools made available in the GeM including e-bidding and reverse e-auction. On award of the Contract(s), it would be construed that the Buyer has obtained all necessary Administrative & Financial sanctions of the competent authority and adequate funds are available indicating the relevant Head of accounts in the awarded Contract(s). These Contract(s) in the GeM shall be governed as per terms and conditions specified in the Order document.
After order receipt then it is the seller’s responsibility to pack and deliver the goods safely to buyer’s delivery address on time. The payment will be processed directly to the registered bank account of the seller after ten days if the buyer is not availing the return policy.
Some Important Guidelines for Sellers
- Any number of products can be offered by a seller subject to the condition that more than one OEM is not represented.
- Seller enrolled with GeM shall be required to furnish requisite information regarding them and their offered product(s) on GeM as per template prescribed in the GeM.
- Sellers are required to keep GeM refreshed with changes/revisions in any of the particulars outfitted by them. Updates towards such changes would entirely be required to be made by Seller inside a time of 15 days from the date of such change(s). The rebelliousness of moment condition might equivalent to disguise of truths and make them obligated of evacuation of their enrolment with GeM and/or corrective action(s) as valued fit.
Seller would likewise be at risk to be suspended from GeM and/or correctional activity, on the off chance that they neglect to comply with any of the terms and conditions stipulated for GeM or on the accompanying grounds. In the event that the seller:-
- Supplies products of second rate/substandard quality.
- Executes services without fitting in with prerequisite given in Service Level Agreement (SLA).
- Neglects to execute a request/contract or neglect to execute it palatably.
- Is pronounced bankrupt or wiped out.
- Neglects to deliver the essential records/data over the span of review/evaluation at any stage; and,
- On some other ground for which, in the sentiment of GeM, the maintenance of the seller or any of its offered item in GeM is not in Public Interest.
The grounds mentioned above are illustrative only. The Appellate Authority for any representation or grievance on account of seller’s removal would be vested with the Director General.
- DGS&D maintains all authority to review and to survey fabricating/testing/quality control arrangement(s) of assembling premises and/or any of the premises identified with assembling procedure of offered result of the Seller. DGS&D additionally maintains whatever authority is needed to investigate nature of the offered item through archives, test reports/authentications, testing at any free lab or through review/testing by its approved delegate/s at Association’s premises or at client’s premises as chosen by DGS&D, for which the dealer should give important offices and labor to such reason.
- If any firm has been de-registered or debarred from business dealings with DGS&D then such firm or their agent/partner shall not be permitted to register and offer/sell their products on GeM in terms of DGS&D Circular No.112 dated 19-09-2016.
- The individual(s) registering on GeM and/or offering or buying Goods/Services and/or participating in e-bidding/reverse auction on GeM, must ensure that they have the requisite authorization to enter into contract with Buyer(s)/Seller(s) in GeM for and on behalf of the concerned legal entity, failing which such individual(s) shall be individually liable for its actions and also for any liability arising out of such actions.
- All sellers on GST needs to be mandatorily GST complaint from 1st July 2017.
There is no doubt that it is a noble initiative and will curb corruption and bring transparency in system in immense way, however as soon as the rules are known to the users, in no time it will be bent to serve the purpose of any miscreant. Government should strengthen the mechanism of periodic audit of buyers and sellers to stop any type of curtail formation and price control. The appellate authority needs to be strong and swift in handling complaints. While curbing corruption is one facet, the quality control mechanism in India needs to be strengthened to become world class. As per directive Government always tries to go for lowest bids, however it needs to be understood that best quality will seldom accompany lowest price. It is a misnomer to assume that with lowest bid the government is registering savings, on proper investigation, it will be found out that lowest bid parties rarely complete their scope and also provide poor quality service and supply which leads to repeated ordering and increased rectification cost. The GeM somehow promises to control the quality aspect but the overall solution is not visible. Strong analytical setup for quality control and fraud identification needs to be structured along with identification of minimum allowable price for entry of sellers needs to be processed. On part of the seller, getting approval to sell on GeM portal itself is a proud moment and provides sufficient recognition for future business development. This opportunity should not be wasted with poor workmanship and giving scope to criticism of a noble initiative. With vigilant buyer and honest sellers only the e-Market place can be successful and progress the nation in the right direction.