Para 10.8.1 - Auction Payment Rules | KartavyaDesk
Original Rule Text
f) Payment Conditions: i) Payment conditions vary based on the auction and contract terms. The payment schedule is specified in the contract. The exact mode of payment is mentioned in the auction terms. Bidders must make timely payments for the auctioned items. ii) The balance sale value (arrived at after adjusting EMD from the actual sale value but including all applicable taxes) shall have to be paid by the successful Bidder within 10 (ten) days for the lot value up to INR 5,00,000 (Indian Rupees Five Lakh) and within 15 (fifteen) days for the lot value more than INR 5,00,000 (Indian Rupees Five Lakh) from the date of bid acceptance (unless other timelines are prescribed in STC / ATC). The balance sale value, including all taxes, if not paid within the prescribed time limits, shall be paid within such time limit as may be extended by the FA-SA, together with any Ground Rent / Charges as specified in the GTC. iii) In the event the Buyer fails to make the requisite payment within the time / extended time stipulated, the sale relating to such lot can be cancelled at the discretion of the FA-SA, and the EMD deposited by the Bidder shall be forfeited in full, and the FA-SA shall be entitled to recover any incidental / consequential loss suffered by it as a result of such failure. iv) If in case of failing to deposit the Payment within the stipulated time, the Buyer can deposit the balance sale value with payment of interest charges for the delays involving a maximum of up to 30 (thirty) days for lot value up to INR 5,00,000 (Indian Rupees Five Lakh) and maximum up to 40 (forty) days for lot value more than INR 5,00,000 (Indian Rupees Five Lakh) from the date of acceptance of bid, in exceptional circumstances with prior permission of the FA-SA. The rate of interest charged on delayed payment will be 7% above the “Base rate of State Bank of India” as prevailing on the last date of payment originally indicated in the Bid. v) If the goods are not removed within the free time period prescribed by the FA-SA, it shall be entitled to recover from the purchaser the ground rent @ Rs 10/- per lot or part of a lot per day or part of a day, or 0.5 % of the value of the goods/ materials remaining undelivered per day or part of a day whichever is higher. Such ground rent or any other charges that the FA-SA may have incurred shall be recovered
What This Means
Para 10.8.1(f) of the Manual for Procurement of Goods, 2017, outlines the payment conditions for goods purchased through auctions by government entities. Essentially, it dictates how and when successful bidders need to pay for the items they've won. The rule emphasizes the importance of timely payments and specifies the consequences of failing to meet the payment deadlines. It applies to all bidders who participate in government auctions and win bids, affecting their financial obligations and potential penalties.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •Payment schedules are determined by the auction and contract terms, with the exact mode of payment specified in the auction terms.
- •Successful bidders must pay the balance sale value (after adjusting the EMD) within 10 days for lot values up to INR 5,00,000 and within 15 days for lot values exceeding INR 5,00,000 from the bid acceptance date.
- •Failure to make timely payments can result in cancellation of the sale, forfeiture of the EMD, and recovery of incidental/consequential losses by the government entity.
- •Delayed payments may be accepted with interest charges (7% above SBI's base rate) for a maximum delay of 30 days (for lot values up to INR 5,00,000) or 40 days (for lot values above INR 5,00,000), subject to FA-SA approval.
- •Ground rent charges apply if goods are not removed within the free time period prescribed by the FA-SA.
Practical Example
Mr. Sharma, a government contractor, wins a bid for scrap metal worth INR 4,00,000 in a government auction. According to Para 10.8.1(f), he has 10 days from the date of bid acceptance to pay the balance sale value (after deducting his EMD). If he fails to pay within this timeframe, the FA-SA (Financial Advisor-Senior Accounts Officer) has the discretion to cancel the sale and forfeit his EMD.
Later, Ms. Verma wins a bid for electronic components worth INR 7,00,000. She has 15 days to pay the balance. However, due to unforeseen circumstances, she anticipates a delay. She requests and obtains prior permission from the FA-SA for a 20-day extension, agreeing to pay the applicable interest charges (7% above SBI's base rate) for the delayed period. She also ensures to remove the goods within the stipulated free time to avoid ground rent charges.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What happens if I can't pay within the initial 10 or 15-day period?▼
What is EMD, and how does it relate to the balance sale value?▼
Who is the FA-SA, and what is their role in this process?▼
What are ground rent charges, and when do they apply?▼
Where can I find the specific payment schedule and mode of payment for a particular auction?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Test Your Knowledge
Question 1 of 3
According to Para 10.8.1(f) of the Manual for Procurement of Goods, 2017, what is the standard timeframe for a successful bidder to pay the balance sale value (after EMD adjustment) for a lot valued at INR 4,00,000?
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