Goods and services which Government procures every year are huge and massive: More than one-fifth of India’s GDP is generated from purchases made by Central Govt, State Govt and various Govt departments, PSUs across India.
We are talking about a market size of around Rs 60,000 crore here when it comes to Govt procurement.
Earlier, the entire process of Govt procurement was staggered, distributed, and without any focus. Whichever Govt department wanted to procure any goods or services, they used to announce tenders at their local level. This led to an unnecessary delay, poor quality of procurement, and a decentralized system with loopholes.
To stop this, the Govt of India launched GeM or Government eMarketplace in 2016, which centralized the entire procurement process by different Govt departments and Ministries into one single portal.
And this is a massive hit.
In 2020, Govt announced that Rs 20,000 crore worth of Govt procurement happened via the GeM portal, and this proved to be a gamechanger.
In this article, we will share what is Government eMarketplace, and what is the GeM Registration Process for businesses. Besides, we will share the entire economics and monetization strategy of Govt, including the GeM registration fee and more
What is Government eMarketplace?
Government eMarketplace is a massive portal, wherein sellers offer their goods and services, and any Govt department or Ministry, or PSU can procure them.
It works just like any e-commerce marketplace such as Amazon or Flipkart; but in GeM, the buyers are only Govt departments, and sellers can be anyone who has registered in the GeM portal.
The GeM registration process for businesses is easy and seamless, and there is no registration fee as well
However, Govt has introduced a monetization strategy, which is dependent on the sales volume and quality of service provided.
GeM portal has some of the most advanced B2B eCommerce features such as e-auction, reverse e-auction, demand aggregation, strict quality control, complete transparency, and more.
GeM Registration Process for Businesses: How to Register in GeM?
The GeM registration process for businesses (or sellers) is extremely easy and seamless and can be done via the GeM portal.
Since there is no GeM Registration Fee, the sellers can be assured of the least expensive way to become part of GeM and start offering their services and products.
However, before registration, the seller should have some pre-requisites:
- What type of business is it? Is it a firm, company, proprietorship, trust, or society?
- Name of the registered business and the related documents
- Aadhaar card and PAN card of the user (mandatory requirement)
- Mobile number of the registered business
- Documents such as CIN, PAN, DIPP, UAM, ITR
- Registered address
- Bank account details
- Active email id
Here are all the GeM Registration Documents required, which will help to complete the steps faster.
In case a seller registers themselves as MSME, then there are added benefits since Govt has reserved a percentage of their procurement for MSMEs, across India
Startups too can register as a seller, and scale their business with Govt procurement on GeM.
The GeM registration process for sellers starts here, wherein you need to enter all the above information.
GeM Registration Fee: Monetisation Strategy of Govt
To be clear, there is no registration fee for sellers. The GeM registration process is entirely free for all sellers and businesses
However, effective June 1st, 2020, the Govt of India has introduced a monetization policy within GeM portals, which is applicable to all sellers.
This is how it works:
- Once a seller crosses Seller Merchandise Value (SMV) of Rs 20 lakh in a year, then they will be required to pay a one-time fee of Rs 10,000 to stay active on the GeM portal as a seller.
- In case a seller has already exceeded SMV of Rs 20 lakh, then a transaction charge will be levied on all orders of Rs 5 lakh or more value. It will depend on the value of the goods and services being offered.
- In case the order value is between Rs 5 lakh to Rs 50 crore, then a 0.5% transaction fee will be charged from the sellers.
- If the order value is between Rs 50 crore and less than Rs 100 crore, then 0.5% is charged for Rs 50 crore (which is Rs 25 lakh) + 0.4% for next Rs 50 crore (which is Rs 20 lakh) + 0.3% charge of value above Rs 100 crore of goods.
- If the order value is more than Rs 200 crore, then 0.5% is charged for Rs 50 crore (which is Rs 25 lakh) + 0.4% for next Rs 50 crore (which is Rs 20 lakh) + 0.3% charge for the next Rs 100 crore (which is Rs 30 lakh) + 0.2% of order value above Rs 200 crore.
In case any product is returned or refunded, then the subsequent charges will be rolled back
Benefits of GeM Sellers
- Full access to a centralized, national procurement portal. This means a massive increase in business opportunities, all across India.
- Zero registration fee.
- Special quotas and benefits for MSMEs, and startups with assured procurement in some categories.
- Zero paperwork needed as it’s a completely online process.
- East brand recognition and brand approval process.
- A robust Online grievance redressal system for all sellers and buyers.
- Easy to use the dashboard to monitor sales, and analyze the trends.
- Sellers from NE states and J&K are exempted from ITR filings as well.
- Dynamic pricing will depend on the market conditions and demand-supply ratio.
If you are an MSME, and trying to find out How to Register in GeM, and need more clarity on the GeM registration fee, then you have arrived at the right destination.
We at MSMEx can help you right away.
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All you need to do is, Book an appointment with MSMEx Experts and give wings to your business venture, on the go!
