Payment &
Contract Support —
Deliver the Order,
Collect Every Rupee

GeM's 10-day payment SLA is a contractual commitment between the government buyer and the seller — and there are escalation mechanisms. Here is the full escalation path. First: verify the payment status in your GeM seller dashboard under "Orders → Payment Status" — confirm whether the delay is at the buyer acceptance stage, DDO stage, or PAO stage, as each has a different resolution path. Second: if the buyer has accepted but PAO has not processed, raise a query through GeM's "Grievance" module — this creates a ticket that the buyer's organisation is required to respond to within 7 working days. Third: for persistent delays beyond 30 days post-acceptance, TaxClue prepares a formal letter to the buyer's Nodal Officer for GeM compliance (every government organisation has one) — this escalation typically resolves payment within 7–10 more days. Fourth: if the order was to a MSME-covered buyer under the MSME Development Act, TaxClue prepares an MSME Samadhaan application for compound interest on the delayed amount. Fifth: for very large delayed payments (above ₹50 lakh), TaxClue advises on approaching the Micro and Small Enterprise Facilitation Council (MSEFC) under the MSMED Act. Most delayed payments are resolved at step two or three. The key is moving through the escalation path systematically rather than waiting passively.

PFMS — Public Financial Management System — is the Government of India's integrated expenditure management and payment platform, maintained by the Controller General of Accounts (CGA) under the Ministry of Finance. All Central Government expenditure — payments from Central Ministries, Departments, Autonomous Bodies funded by Central Government, and Central PSUs for their government-funded projects — is processed through PFMS. State Government payments typically use their own Financial Management Information Systems (FMIS) — each state has its own (IFMS in many states, BEAMS in Kerala, IFMIS in others) — and these do not use PFMS. For suppliers primarily dealing with state government orders, PFMS registration may not be required. Payments from Central PSUs for their commercial operations (not government-funded projects) may go through the PSU's own ERP system (SAP, Oracle) without PFMS. TaxClue identifies whether PFMS registration is required for your specific buyer and order before initiating the registration process.

Whether LD is enforceable for a 3-day delay depends on several contract-specific factors. First: does the signed contract actually include an LD clause? Many smaller government orders — particularly GeM direct purchase orders — are placed on standard GeM terms which have a rating mechanism and cancellation right but not always a formal LD deduction mechanism. Second: if an LD clause exists, does it require prior written notice before deduction? Many government contracts require the buyer to issue a delay notice before deducting LD — a unilateral deduction without notice may be challengeable. Third: was the delay caused fully by the supplier, or were there contributing factors on the buyer's side — delayed site access, PO amendments, force majeure events? Contributing buyer factors are grounds for waiver of LD. Fourth: is there a minimum delay period before LD kicks in? Some contracts specify that LD applies only if delay exceeds a grace period (often 7–14 days). Fifth: does the LD clause have a maximum cap, and has the proposed deduction exceeded it? TaxClue reviews your specific contract and delivery timeline against these criteria and prepares a formal representation to the buyer's procurement officer if the LD deduction is challengeable — in many cases, LD waivers or reductions are granted when formally and correctly requested with appropriate documentation.

A rejected invoice correction requires specific GST procedural steps — you cannot simply issue a corrected invoice with the same invoice number. The correct procedure under GST rules is: (1) Issue a Credit Note against the original invoice — the credit note references the original invoice number and reverses the incorrect amount. The credit note should be issued within the financial year of the original invoice where possible (this matters for ITC reversal in the buyer's GSTR-2B). (2) Issue a fresh invoice with a new invoice number, correct GST rate, and the same order/PO reference. (3) Upload the fresh invoice to the GeM portal or physically resubmit to the buyer's accounts section — the original rejected invoice reference may need to be noted. (4) Inform the buyer's accounts officer of the credit note and fresh invoice — provide both documents together to avoid confusion. The payment timeline typically restarts from the fresh invoice acceptance date, though some buyers honour the original submission date for SLA purposes when the error was minor. TaxClue prepares the credit note, fresh invoice, and the covering communication to the buyer to minimise the payment delay from the correction process.

Performance Bank Guarantee (PBG) is mandatory for most government contracts above a threshold — typically ₹25 lakh for Central Government contracts, though individual organisations set their own thresholds. The PBG amount is usually 3–10% of the contract value, submitted within 15–30 days of contract award. For MSME-registered suppliers, some government buyers accept a Demand Draft or Fixed Deposit Receipt in lieu of a bank guarantee — MSME suppliers should specifically request this substitution as it avoids the bank guarantee processing fee and the need for a sufficient credit limit with the bank. If your bank is unwilling to issue a guarantee (due to insufficient collateral or credit limit), options include: (1) approaching a different bank — smaller cooperative banks sometimes issue guarantees against cash margin more readily; (2) requesting the buyer to allow a cash security deposit of equivalent amount; (3) for MSME suppliers, specifically invoking the MSME exemption provision if the buyer offers one; (4) approaching SIDBI or NSIC for guarantee coverage schemes for MSMEs. TaxClue advises on the most viable PBG route for your specific situation and prepares the bank guarantee application with the correct format and validity as specified in the contract.