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Para 6.2 - Payment Terms | KartavyaDesk

Non-Consultancy Manual

Original Rule Text

6.2. Payment Clause 1. The elements of price included in the quotation of a bidder depend on the nature of the services to be performed, 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 case of Non consultancy services, the elements of price would depend on whether it is an input or output admeasurement contract. In case of input admeasurements unit price of each element, service charges and taxes thereon shall be the elements of price schedule. There may be miscellaneous costs also other than inputs. In case of output admeasurements unit price of services delivered and taxes thereon shall be the elements of price schedule. 3. It is, therefore, necessary that, to enable the bidders to frame their quotations properly in a meaningful manner, the tender documents should clearly specify the desired terms of delivery, respective duties and responsibilities to be performed by the service provider and the procuring entities. 4. Elements of Price: Where the price has several components, 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; and 5. Currency: The tender documents are to specify the currency (currencies) in which the tenders are to be priced. As a general rule, domestic bidders are to quote and accept their payment in Indian currency; Indian agents of foreign service providers are to receive their agency commission in Indian currency; costs of services, which are delivered from abroad or by foreign nationals against the contract, may be quoted in foreign currency (currencies) and paid accordingly in that currency; and the portion of the services, which are to be undertaken in India are to be quoted and paid in Indian currency.

What This Means

Para 6.2 of the Manual for Procurement of Non-Consultancy Services focuses on how payments should be structured in contracts. It emphasizes the importance of clearly defining all price components in the tender documents, including taxes, duties, and service charges. This ensures that bidders can accurately prepare their quotations and avoid confusion later on. The rule also addresses currency considerations, specifying that domestic bidders should quote and be paid in Indian Rupees, while foreign service providers may quote in foreign currencies for services delivered from abroad.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Tender documents must clearly specify all price components (taxes, duties, service charges).
  • •Price structure depends on whether the contract is input or output-based.
  • •Bidders must provide a cost break-up indicating prices and taxes for each component.
  • •Domestic bidders quote and are paid in Indian Rupees.
  • •Foreign service providers can quote in foreign currencies for services delivered from abroad.

Practical Example

The Ministry of Electronics and Information Technology (MeitY) is procuring data entry services. The tender document clearly states that the price should include the base rate per entry, GST, and any other applicable taxes. M/s Data Solutions, an Indian company, submits a bid quoting ₹2 per entry plus 18% GST. A foreign company, Global Data Inc., also bids, quoting $0.03 per entry for data processing done overseas and ₹1 per entry for quality checks done in India, with applicable taxes for the Indian component. The payment schedule is linked to this cost break-up, ensuring transparency and compliance with Para 6.2.

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 the tender document doesn't clearly specify all price components?▼
It can lead to confusion, inaccurate bids, and potential disputes during the contract execution. The procuring entity should amend the document to clarify the price components.
Can a foreign company demand payment in a foreign currency for services performed in India?▼
No, according to Para 6.2, the portion of services undertaken in India should be quoted and paid in Indian currency.
What is the difference between input and output admeasurement contracts?▼
In input admeasurement, payment is based on the resources used (e.g., man-hours, materials). In output admeasurement, payment is based on the deliverables achieved (e.g., number of reports generated).
Does Para 6.2 apply to consultancy services?▼
No, Para 6.2 specifically applies to the procurement of non-consultancy services. Consultancy services have separate guidelines.
What should I do if a bidder's cost break-up seems unreasonable?▼
The procuring entity should seek clarification from the bidder and may reject the bid if the cost break-up is not justified or compliant with the tender requirements.

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 6.2 of the Manual for Procurement of Non-Consultancy Services, what is a crucial requirement for tender documents to ensure accurate bidder quotations?

Related Rules

Para 3.2Manual for Procurement of Non-Consultancy Services, 2025 - Para 3.2 - Chapter 3Para 4.1.1Manual for Procurement of Non-Consultancy Services, 2025 - Para 4.1.1 - Chapter 3Para 4.2.3Manual for Procurement of Non-Consultancy Services, 2025 - Para 4.2.3 - Chapter 3Para 4.4Manual for Procurement of Non-Consultancy Services, 2025 - Para 4.4 - Chapter 3Para 6.8Manual for Procurement of Non-Consultancy Services, 2025 - Para 6.8 - Chapter 6

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