What is EMD in GeM Tenders?
Earnest Money Deposit (EMD), also known as Bid Security, is a mandatory financial guarantee submitted by bidders in GeM tenders to prove earnest intent. It usually ranges from 0.5% to 5% of the total estimated contract value.
Sellers on GeM can submit EMD via online payment (NEFT/RTGS), Bank Guarantee (e-BG), or claim legal exemptions under Ministry of Finance procurement rules if eligible.
Who is Exempted From Paying EMD on GeM?
As per Public Procurement Policy and GeM guidelines, specific categories of sellers can claim 100% EMD exemption during bid submission:
Micro & Small Enterprises (MSEs)
Sellers registered with Udyam / NSIC offering manufactured goods or self-rendered services are fully exempt.
DPIIT-Recognized Startups
Government-recognized startups with valid DPIIT registration certificates receive EMD exemption across eligible categories.
Central / State PSUs
Public Sector Undertakings and Government Autonomous Bodies are exempted from providing EMD in government bids.
Annual Turnovers / Standing Exemption
Sellers holding valid exemptions granted under specific department standing instructions or annual contracts.
Step-by-Step EMD Submission & Exemption Workflow
Our team assists you through every critical checkpoint during bid preparation to prevent technical rejection:
- Tender Clause Analysis: Extract precise EMD requirement amount, acceptable instruments, and exemption allowance clauses.
- Exemption Eligibility Verification: Match Udyam / Startup NIC codes directly with the bid category to ensure valid waiver claims.
- Online EMD Deposit / e-BG Setup: Guide real-time NEFT/RTGS generation or seamless bank e-PBG portal linking.
- Bid Securing Declaration Upload: Draft and format required Bid Securing Undertakings when EMD is explicitly waived.
- Refund Tracking & Incident Reporting: Systematically track and auto-escalate non-refunded EMD amounts post bid finalization.
Documents Required for EMD Exemption & Claims
For Exemption Claimants
- Udyam Registration Certificate (with relevant manufacturing/service activity code)
- DPIIT Startup Recognition Certificate (for registered Startups)
- Format-compliant Bid Securing Declaration on official letterhead
For EMD Payment / e-BG Submissions
- Challan copy / UTR Number generated via GeM payment gateway
- Electronic Bank Guarantee (e-BG) SFMS confirmation from issuing bank
- Bank Account details for EMD refund processing
EMD Consultancy Fee Structure
| Service Package | Scope of Consultancy | Consultancy Fee |
|---|---|---|
| Single Bid EMD & Exemption Audit | Clause review, Udyam/Startup exemption validation, and Bid Securing Declaration drafting for 1 tender | ₹1,499 + GST |
| Complete EMD & e-PBG Support (Monthly) | Unlimited bid EMD verification, e-BG bank coordination support, and stuck EMD refund recovery assistance | ₹3,999 + GST |
Frequently Asked Questions (FAQs)
1. Is Udyam Certificate alone sufficient to claim EMD exemption in all GeM tenders?
Yes, provided the Udyam Certificate covers the specific Major Activity and NIC category corresponding to the item or service being procured in the bid.
2. What happens to the EMD if my bid is not selected (L2/L3)?
EMD paid online via GeM gateway is automatically refunded back to the originating bank account within 15 days after financial bid evaluation or award of contract.
3. Can a trader claim MSE EMD exemption on GeM?
No. Public Procurement Policy benefits (including EMD exemption) apply primarily to Manufacturers and Service Providers. Retail/Wholesale traders are generally excluded unless specifically allowed in the custom tender ATC.
4. What is e-PBG and when is it required?
e-PBG (Electronic Performance Bank Guarantee) is required from the successful winning bidder (L1) upon contract award to ensure satisfactory execution of the order.
*Note: Document requirements and Service Fee may vary by tender, category and registration type. Tendershala's consultants confirm the exact checklist and service fee that applies to your specific requirement.