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Caution Money

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113 views25 pages

Caution Money

Uploaded by

pkpankajkumar084
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Caution Money

GeM

1
Introduction

GeM platform allows the Buyers to place an order to Sellers for their requirement of
Goods or services. To ensure there is a certain ownership of the Seller for
products/services listed in marketplace specifically catalogue and fulfilment,
mechanism of caution money bearing financial penalty to sellers has been devised
albeit in measured proportion.
All sellers on GeM are required to deposit a one-time amount as under as caution
money:
a) Seller Turnover less than 1 Crore: Rs 5,000/-
b) Seller Turn over > 1 Crore but < 10 Crore: Rs 10,000/-
c) Seller Turn over > 10 Crore: Rs 25,000/-
Note- For all cases where there is no turnover, the seller will deposit the lowest slab
as caution money.
Sellers like SHG, Artisans, Weavers, MSE Women and MSE (SC/ST) will be
exempted from depositing Caution Money. 2
Caution Money Deduction/Penalty

The caution money shall remain at the disposal of GeM . This can be forfeited in part or in full
in following circumstances:
a) Seller rejects or does not accept any Direct Purchase / L-1 Purchase order within defined
timelines leading to order auto cancellation.
b) Order cancelled by buyer for the orders that are not delivered until delivery period, and an
invoice is not created for such an order.
c) Order cancelled by the buyer after the delivery period expires plus 15 days and an invoice
is generated by the seller, but the order is not delivered.
d) Failure of the seller in executing any GeM contract or if the Seller fails or neglects to
observe or perform any of his obligations under the contract (applicable only in respect of
contracts that did not have provision of Performance Security / PBG).
e) Withdraws any bid submitted on GeM within the period of validity of the bid.
f) Fails to furnish requisite performance security / PBG as per GeM e-bid / RA conditions.
3
Caution Money Process

Seller Logins to GeM Seller Selects the bank The Account is opened
and goes to Caution to Open the caution instantly. The Seller views
Money dashboard Money Account the Account details on GeM

Seller adds the Funds The Seller is Seller clicks on


to the Caution Money redirected to Bank to Generate Challan and
Account add the funds View Statement

The Account Balance is


Updated on GeM and made
visible to Seller in the
dashboard
4
Features and additional information

To View the Caution Money Policy, please click here and search for relevant clauses.
The Sellers do not need to do any KYC to Open the Account for caution Money. The
Account would be Opened by Bank Instantly without asking for any
documentation/KYC from Seller
The Account being Opened is a Sub account of the GeM escrow account with the sole
purpose of collecting the Caution Money on behalf of Seller. The account cannot be
used for any other purpose by the seller.
The Seller can view the Transaction summary/Statement of the account on GeM
portal. The required Provision is made available on GeM portal in Sellers Caution
Money Dashboard.
A seller can withdraw an amount once it has been deposited by the buyer, but only in
case of account closure or if excess funds have been updated.
Once an account is created with a bank it can only be closed after closing his GeM
profile/account. Each seller can open only one account.
5
Caution Money User Manual

6
Open gem.gov.in and click on Login.

7
Enter the User ID, the Captcha text and click Submit.

8
Enter the Password and click on Submit.

9
Click here to manage your
Caution Money Account.

10
11
Click here to update the account balance
in case it is not reflecting On GeM.
12
Click here to generate Challan to add
funds or to view account statement.

13
Click here to withdraw Excess Funds.

14
Click here to withdraw Excess Funds.

15
Click here to confirm.

16
Withdraw Success Message.

17
Error Message- When Balance is equal to
or less than Threshold.

18
Caution Money Exemption
User Manual

19
Caution Money Process

Following Seller categories only are exempted from Caution Money Deposit.
1. SHG
2. Artisans
3. Weavers
4. MSE Women
5. MSE (SC/ST)

Provided below is the process flow for Caution Money Exemption

Seller Logins to GeM and Seller Selects the bank to The Account is opened
goes to Caution Money Open the caution Money instantly. The Seller views the
dashboard Account Account details on GeM

User will be able to upload The threshold of the seller


the products and transact will reflect as Rs. 0
normally on GeM.

20
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For the sellers exempted from
Caution Money the threshold
will reflect as Rs. 0.

23
Summary

Caution Money is a penalty mechanism devised by GeM to ensure that sellers


take certain ownership of the products and services listed on the marketplace,
specifically catalog and fulfillment.

All sellers on GeM are required to deposit a one-time amount as under as


caution money on the basis of pre-defined turnover slabs.

Sellers like SHG, Artisans, Weavers, MSEs, Women and ST/SC entrepreneurs, will be
exempted from depositing Caution Money.
Caution Money remains at the disposal of GeM and can be forfeited in part or full
under various defined circumstances.

The Seller is not required to do any KYC to open their account for caution money.
24
Document Updated 05th July 2022

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