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

According to a senior government official, the Government e-Marketplace (GeM) has significantly reduced transaction charges for sellers and service providers on its platform. Additional CEO of GeM, Mr. Ajit B. Chavan, stated that this "bold" move is part of the government's 100-day initiative to enhance the ease of doing business and promote a more inclusive economy. Effective August 9, the new revenue policy eliminates transaction charges for all orders valued up to US$ 11,978 (Rs. 10 lakh), up from the previous ceiling of US$ 5,989 (Rs. 5 lakh). For orders above US$ 11,978 (Rs. 10 lakh) and up to US$ 1.2 million (Rs. 10 crore), a transaction charge of 0.30% of the total order value will apply, reduced from 0.45%. Orders exceeding US$ 1.2 million (Rs. 10 crore) will incur a flat fee of US$ 3,593 (Rs. 3 lakh), a substantial decrease from the prior maximum charge of US$ 86,841 (Rs. 72.5 lakh).

He noted that nearly 97% of GeM transactions will now incur no transaction charges. In contrast, the remaining transactions will attract a nominal fee. This restructuring of transaction fees is a pivotal step in improving GeM's ease of doing business. It aligns with the government's commitment to lowering transaction costs. The updated fee structure aims to democratize access to the public procurement ecosystem, particularly benefiting micro and small enterprises (MSEs) that often face financial and operational challenges. GeM seeks to level the playing field by significantly lowering transaction charges and fostering opportunities for small businesses to contribute value and innovation in public procurement. Launched in 2016, GeM is a unified digital platform facilitating end-to-end procurement of goods and services by central ministries, state departments, public sector enterprises, and cooperatives, eliminating inefficient and corrupt manual processes.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.