GeM slashes transaction charges levied on sellers, service providers for public procurement

New Delhi: Public procurement portal GeM has significantly slashed transaction charges levied on sellers and service providers on its portal, a senior government official said on Friday.

Government e-marketplace (GeM) Additional CEO Ajit B Chavan said that this "bold" move was part of the government's 100 days initiative.

"Aligning with the government's ongoing commitment to foster ease of doing business and build a more inclusive economy, Government e-Marketplace has recently announced a significant reduction in the transaction charges levied on sellers, service providers transacting on its platform," he told reporters here.

Accordingly, GeM has announced a New Revenue Policy of the portal with effect from August 9.

As per the new policy, all orders valued up to Rs 10 Lakh will now attract zero transaction charges, as opposed to the earlier order value ceiling of Rs 5 lakh.

"Orders above Rs 10 Lakh up to Rs 10 crore will be levied transaction charges worth 0.30 per cent of total order value, as compared to earlier transaction charges of 0.45 per cent," he said, adding orders above Rs 10 crore will now pay a flat fee of Rs 3 lakh, a "massive" reduction from the transaction charges previously capped at Rs 72.5 lakh.

He added that nearly 97 per cent of the transactions on GeM will be attracting zero transaction charges, while the remaining will incur a nominal fee at 0.30 per cent of order value above Rs 10 lakh subject to a maximum of Rs 3 lakh only, irrespective of the size of the order.

"This step is a watershed moment in terms of Ease of doing Business on GeM and is also in line with government's commitment of reduction in cost of transactions," he said.

He added that the latest transaction fee structure is aimed at democratizing access to public procurement ecosystem.

It aims to particularly benefit MSEs, which often face challenges navigating cumbersome financial and operational barriers.

"By considerably lowering transaction charges, GeM aims to level the playing field, thereby creating opportunities for small-scale businesses to deliver value and innovation in public procurement," Chavan said.

GeM is a unified digital platform that facilitates end-to-end procurement of goods and services by various central ministries, state departments, public sector enterprises, autonomous bodies, panchayats, multi and single state cooperatives. It was launched in 2016.

The online portal was established with a clear objective to eliminate age-old manual public procurement processes that were riddled with inefficiencies and corruption.