The order comes at a time when most MSMEs are facing a severe liquidity crunch owing to the pandemic and lockdown. Aimed at improving the discipline and timeliness of payments to vendors, especially micro, small and medium enterprises (MSMEs), the government decided to levy a 1% interest per month on late payments for purchases made on the government e-marketplace (GeM).
“It is decided that whenever a Consignee Receipt and Acceptance Certificate (CRAC) is auto-generated or issued by a buyer and payment is not made 10 days hereafter, the buyer organisation will have to pay penal interest @ 1% per month for the delayed payment,” said finance minister Nirmala Sitharaman’s office in an update via Twitter on Friday.
The order comes at a time when most MSMEs are facing a severe liquidity crunch owing to the pandemic and lockdown. “Government has been repeatedly emphasising the need for prompt payment to vendors specially MSME vendors,” the order dated Friday said.
As per rule 149 of the General Financial Rules 2017, buyers are mandated to make payments within ten calendar days after the CRAC has been generated in the GeM.
According to the directive, interest will be charged from the first day beyond the ten day period until the payment is made. The late payment levy shall be over and above any other interest charges applicable as per the contract between the buyer and seller, it said.
The amount collected from the late payment levy would be deposited in an account maintained by the GeM and shall be used for the education of sellers and buyers or any other purposes related to GeM or public procurement, the order said.
Source: indiatimes.com
