How do MSE payments work on GeM — timelines and disputes?

The 10-day rule

For MSE sellers, GeM policy requires payment within 10 days of CRAC generation. This is one of the fastest payment cycles in Indian government procurement — traditional PSU billing can stretch 60–120 days.

The payment sequence

1. You deliver the goods/service to the consignee address on the PO.
2. The consignee inspects and generates the CRAC on GeM.
3. Invoice is auto-generated on the portal — you don't submit a separate paper invoice.
4. Buyer's PFMS-linked account releases payment within 10 days.
5. Funds land in your registered current account.

What actually causes delays

CRAC delay: the buyer's consignee sits on inspection. Follow up in writing within 3 days of delivery. If no response in 10 days, GeM auto-generates a deemed acceptance.

Discrepancies: invoice mismatch, HSN code mismatch, or the buyer disputes quality. Resolve on portal — don't let a dispute sit.

Buyer's fund availability: occasionally a department runs low on budget head. This is the hardest to fix; escalate.

Escalation path

1. GeM grievance portal — file a ticket citing the PO and CRAC date.
2. Buyer's Nodal Officer — every buying department has one.
3. MSME Samadhaan (samadhaan.msme.gov.in) — statutory recovery mechanism for MSE payment delays. Filing a case triggers legal proceedings against the buyer, and defaulters are publicly listed.
4. State MSE Facilitation Council — legally empowered to arbitrate.

Interest on delayed payment

Under the MSMED Act, delayed payments to MSEs attract compound interest at three times the bank rate. Buyers face audit issues if delays become chronic, which is why the 10-day rule is largely respected in practice.

Practical tips

Track every PO in a simple sheet with 'PO Date / Delivery Date / CRAC Date / Payment Date'. Follow up the moment CRAC crosses 3 days pending. Escalate at Day 15 without payment. Never let a receivable cross 30 days silently.