Para 6.2 — GOODS_MANUAL

a) As far as possible, the payment terms and time schedule should be given in the contract and must be adhered to. Any foreseeable payment delays should be communicated to the suppliers in advance; b) Prompt and timely provision of statutory certificates to the seller for taxes deducted at source is as much a part of the payment as the amount actually released. Detailed payment advice showing the calculations and reasons for the amounts disallowed and taxes deducted must be issued to the supplier along with payment. As soon as possible, but not later than the date of submission of tax returns, the procuring entity must provide the statutory certificates for the taxes deducted from the supplier so that he can claim set-offs and refunds from the concerned authorities. As far as MSME suppliers are concerned, MSME Act 2006 has provisions (refer to para 1.11.2-4-c) for details) for timely payments within 45 days and a levy of penal interest for delayed payment and arbitration/ conciliation for related complaints by Micro and Small Enterprises Facilitation Councils. c) Release of payment and settlement of the final bill should be processed through the Associated/ integrated Finance as per the terms and conditions of the contract; d) No payments to contractors by way of compensation or otherwise outside the strict terms of the contract or more than the contract rates should be allowed; e) Before the payment is made, the invoice should be cross-checked with the actual receipt of material/assets/services to ensure that the payment matches the actual performance; f) While claiming the payment, the contractor must certify on the bill that the payment being claimed is strictly within the terms of the contract and that all the obligations on his part for claiming this payment have been fulfilled as required under the contract. There should also be a suitable provision for verification of the authenticity of the person signing the invoice and so on to claim the payment;

6.2. Payment Clause 1. The elements of price included in the quotation of a bidder depend on the nature of the goods to be supplied and the allied services to be performed, the location of the supplier, the location of the user, terms of delivery, extant rules and regulations about taxes, duties, and so on, of the seller's country and the buyer's country. 2. In the case of indigenous goods, the main elements of price may include raw material, production cost, overhead, packing and forwarding charges, margin of profit, transit insurance, excise duty and other taxes and duties as applicable. In the case of imported goods, in addition to elements of price similar to the above (other than excise duty and taxes), there may be elements of customs duty, import duty, landing and clearing charges, and commission to Indian agents. Further, depending on the nature of the goods (whether domestic or imported), there may be cost elements towards installation and commissioning, operator's training, and so on. 3. Elements of Price: Where the price has several components, such as the price of the goods, cost of installation and commissioning, operators’ training, and so on, bidders should be asked to furnish a cost break-up indicating the applicable prices and taxes for each of such components along with the overall price. The payment schedule and terms will be linked to this cost break-up. 4. Currency: The tender documents are to specify the currency (currencies) in which the tenders are to be priced. For domestic bidding, regardless of whether the bidder is foreign or Indian, the currency of the bid and payment should be entirely in Indian Rupees. In GTE (Global Tender Enquiry), foreign bidders have the flexibility to quote prices and receive payments in either Indian Rupees or freely convertible currencies such as US Dollars, Euros, Pound Sterling, Yen, other relevant currencies104, or a combination thereof. However, prices for goods works, or services (including Agency Commission) performed or sourced in India must be quoted and paid for in Indian Rupees. Indian bidders are required to quote in INR only. During the evaluation, all quoted prices are converted into Indian Rupees as per the procedure mentioned in para 7.5.2-1. 5. As a general rule, domestic bidders are to quote and accept their payment in Indian currency; Indian agents of foreign suppliers are to receive their agency commission in Indian currency; costs of imported goods, which are directly imported against the contract, may be quoted in foreign currency (currencies) and paid accordingly in that currency; and the portion of the allied work and services, which are to be undertaken in India (like installation and commissioning of equipment) are to be quoted and paid in Indian currency. 6. Payment to Suppliers: In a supply contract, the delivery of goods is the essence of the contract for the purchaser. Similarly, receiving timely payment for the supplies is the essence of the seller's contract. A healthy buyer-supplier relationship is based on the twin foundation of timely and quality supply on the one hand and prompt and full payment to the supplier on the other. It should be ensured that all payments due to the firm, including the release of the performance security, are made on a priority basis without avoidable delay as per the tender/contract conditions: