PRC and CRAC: The Two Certificates That Control Government Payments

The person receiving the goods is the one who created it. In government procurement, the consignee is the person responsible for the stores or the receiving officer appointed within the buyer’s organization. They access the GeM portal using their secondary-user credentials and cross-check the delivery with the purchase order and digitally generate the PRC - signed via OTP under the Information Technology (Amendment) Act, 2008.

There is no exchange of physical documents. No stamp or manual signature is necessary. The e-sign based on OTP makes it, in legal terms, the same as a physical document.

It has to be issued no later than 48 hours after delivery. This timeframe is a strict one as per GeM’s General Terms and Conditions. Any delay in issuing the PRC will disrupt the entire schedule downstream. Inspection will get delayed. CRAC will get delayed. Even the payment will get delayed. So, largely the seller has no influence over events once the goods have left the premises, which makes it very important for sellers to keep track and even remind the purchaser if the PRC confirmation has not been received within 48 hours of delivery.

The PRC mainly consists of three fundamental data:

• Quantity received,
• date of receipt, and
• a few reference details of the order

The buyer, Drawing and Distributing Officer (DDO), Pay and Accounts Officer (PAO), and the supplier can immediately access the PRC via one portal after it is created. It is a tight document, but its date and time are what act as the basis for the entire payment claim.

As soon as the PRC is issued, the 10-day inspection period starts. After receiving the PRC, the consignee has 10 days to examine the items and produce a CRAC. The payment process cannot proceed until the CRAC is released. Besides, the CRAC cannot be released if the PRC is not ready yet.

Any missing PRC or PRC issued later than scheduled is not just a simple nuisance. It is rather a major source of holdup that leads to a delay in payment, delay in obtaining formal rights for follow-up, and delay in the capability of escalating any matter through the system.

A CRAC (Consignee’s Receipt and Acceptance Certificate) is the last document for delivery in government procurement. It is issued post-delivery. It follows the PRC, physical inspection, partial acceptance, or rejection.

The certificate is the immediate cause of payment. Without a CRAC, there will be no payment - not even a delayed payment, but absolutely no payment at all. It is the legal document of acceptance that the paying entity needs before disbursing funds.

The consignee issues the CRAC, the same officer who delivered the PRC. At this point, the inspection must have been fully done. The performance of the goods in terms of quality, quantity, and specifications has been checked against the purchase order. Next, the consignee re-enters the GeM portal and digitally creates the CRAC, once more employing the OTP-based e-signing process.

The CRAC should be issued not later than 10 days from the PRC date. This time limit has been stipulated by GeM’s General Terms and Conditions and is based on GRF Rule 149. This rule regulates all procurement through GeM. Similar to the PRC deadline, there is no leniency here. The consignee has to operate within this time frame.

It is very different from the PRC in that the CRAC contains a lot of information:

• Total quantity ordered
• Quantity accepted - the amount that can be paid
• Quantity rejected - with the specific, documented reasons like damage, shortages, or specification mismatch.

Every single field is a point of concern. The accepted quantity is the one that is the basis for the payment. The rejected quantity, with its documented reasons, is the basis for any dispute that may follow. Rejection entries that are vague or without documentation are not in compliance with GeM’s rules. This way, the reasons have to be specific and must be recorded on the portal at the time of CRAC generation.

The GeM portal notifies the buyer, consignee, head of department (HOD), and the supplier automatically and simultaneously. The buyer processes the bill. The DDO sends the bill to the PAO. The system disburses 100% payment for accepted goods within 10 working days from the CRAC date applicable to both goods and services. In case of services, the system makes payment from a monthly cycle, reflecting the period of service certified by CRAC, subject to the condition that there is no contractual clause (CC) specifying a schedule in the contract.

Both documents will be issued by the same department, on the same portal, and using the same digital signing method.

The PRC starts the process, the CRAC closes it. Everything in between is inspection, and everything after is payment.

Usually, delays occur when someone in the chain does not expect the next step. Here is the entire chain with all the steps in sequence and with the deadlines attached.

• Step 1: Order placed on GeM - The buyer initiates a contract on the portal. After the seller sends the goods, he/she issues an online invoice through GeM. Both the buyer and the DDO receive an automated email and SMS notifications after submission of the invoice.
• Step 2: PRC generated (within 48 hours of delivery) - The consignee is required to go online, endorse acceptance, and generate the PRC. It is the delivery date that is officially recorded. The 10-day quality check period also starts for the goods.
• Step 3: Inspection period (up to 10 days from PRC date) - The consignee carries out the physical inspection of the products, checking whether they are up to the mark for quality, quantity, features, etc. During this time, the consignee has the right to accept or reject the goods completely or partially. No money is transferred at this time.
• Step 4: CRAC issued (within 10 days of PRC) - The consignee registers the result online. The CRAC is completed and sent in. Everyone involved gets instant updates via the portal. The payment countdown starts from here.
• Step 5: Bill processing starts - The buyer manages the bill. In case government bodies are on PFMS, the DDO sends the bill to the PAO through the PFMS portal. PAO checks various linked documents - purchase order invoice, PRC, and CRAC - before deciding to continue.
• Step 6: Payment made (within 10 days of CRAC date) - PAO disburses full payment for goods that are accepted. On GeM, the transaction is treated as complete. When it is a service, the monthly bill is done within the same 10-day post-CRAC timeframe.

If all stakeholders do their work on time, the overall cycle, from delivery to payment, will not exceed 20 days. Though if there are delays at any one step, the cycle time gets longer. The most common problem area is the CRAC, which is directly connected to what happens when things go wrong.

The inspection time is between the PRC and the CRAC. This is the time when the cosignee has the legal right to accept or reject the delivery. This right is a way in which government buyers are protected. Though it also brings obligations for sellers.

Full Rejection

In case the consignee rejects the entire lot, they note it in the CRAC with the reasons for rejection. The seller is responsible for picking up the rejected goods within 10 days. The buyer should not be made to pay for it. If the goods are left uncollected for a long time, the buyer has the right to get rid of them. In that case, the seller has to bear the disposal costs entirely.

Partial Rejection

It’s very normal to partially accept things. For example, if 100 units were sent and 15 were found to be damaged, the CRAC will show 85 as accepted and 15 as rejected. The buyer will release the payment for 85 units. Those 15 will be picked up in the same 10-day period.

No Payment on Rejected Goods

This is an unbreakable rule. It is part of GeM’s General Terms and Conditions and also supported by GFR rule 149. Rejection signifies no payment. Partial rejection means payment is made for only the accepted part. No exceptions are allowed.

A consignee has to come up with precise, verifiable grounds for rejecting an order. Some common examples of rejection could be:

• The order quantity is less than the purchase order
• Goods have been physically damaged during delivery
• Contracted specifications have not been met by the goods delivered
• Goods have not been delivered as per the agreed-upon quality standards
• Some components or accessories mentioned in the order are missing

Vague entries, “not satisfactory” without reasons, don’t meet GeM’s documentation. When the CRAC is generated, reasons should be specific and documented.

Disputing a Rejection

The dispute resolution procedure of GeM essentially involves the parties negotiating a settlement through a coordinating committee. This committee is composed of members from both parties and chaired by the primary user of the buyer’s organisation. If the matter is still not resolved, it proceeds to arbitration under the Arbitration and Conciliation Act, 1996. GeM SPV is not involved as a party to the dispute. The site of arbitration is based on the primary buyer’s location.

Government procurement is not just a two-party transaction. Several officials have different roles, and each one of them is bound by time. If one person delays, all others downstream will be waiting.

• Consignee - The consignee is the key character in the post-delivery process. They are the ones who physically hand over the goods, examine them, and produce both the PRC and the CRAC. Being designated by the Primary User on the GeM portal as a secondary user, their actions or failure to act will immediately influence the time when the payment will be made to the seller. Every portal action is accompanied by a timestamp that is visible.
• Buyer - Typically, the buyer places an order and then processes the bill once the CRAC has been guaranteed. The buyer must make certain that procurement is done according to the GFR 2017 rules and GeM’s terms. Buyers have access to all the documents, including the PRC CRAC invoice in real time.
• DDO (Drawing and Disbursing Officer) - If the method of payment in the government organization is through PFMS, then this role is relevant. The DDO account is not set up correctly, or if the bill is not communicated in time, even a valid CRAC cannot result in payment.
• PAO (Payment Authority Officer) - Actual payment is made by the PAO. They log in to PFMS, check all linked documents, and disburse money within 10 days of the CRAC date. With non-PFMS payment modes, the PAO works directly on the GeM portal.
• Primary User: Head of Department - HOD is the one who gets the organization registered on GeM and sets up all the secondary user accounts - buyer, consignee, and DDO. Direct transactions are not carried out at this level. Yet, the HOD is responsible for the lawfulness of all the roles under them. They lead the coordination committee in case of a dispute.

Most GeM payment delays have little to do with the functionality of the portal itself. It is more of a result of a failure to act on someone’s part within the given timeframe. What follows are the main areas where mistakes occur most frequently.

• PRC not released within 48 hours - Everything else you do, including inspection and raising the CRAC, becomes really tight even before you know there’s a problem. If the seller should reach out to the buyer right away.
• CRAC not issued within 10 days - This is, in fact, the largest single reason for the hang-up of payments on GeM. In certain portal settings, if no one does anything, a CRAC is issued automatically, but one shouldn’t bank on that. Contact with the HOD or buyer is the right move if the consignee is not responding.
• Invoice not match the purchase order - Even a small difference in quantity or price between the invoice and the purchase order on the website blocks the flow of the bill. Each invoice should be given a thorough check against the purchase order before being submitted on the portal.
• Rejection made without giving detailed reasons - Not providing detailed rejection reasons creates holes in documentation, which results in the initiation of disputes. Both parties waste their time as the record gets questioned and amended. Consignees must record exact, verifiable reasons simultaneously.
• Rejected goods not collected within 10 days - Storage fees will be charged from the 11th day onwards. If, after a certain period, the buyer still doesn't collect the goods, the seller may, at the buyer's cost, dispose of the goods. Rejection notices are mandatory actions.

• For Consignees and Procurement Officers - Deadlines are not flexible. PRC deadline: 48 hours. CRAC deadline: 10 days. The consignee will become the bottleneck and delay the payment of the supplier's rightful dues. Inspection must be done without any delay. The reasons for the rejection must be well-documented and also very specific. Every single portal activity is timestamped and can be seen not only by all stakeholders but also by the audit authority.
• For DDO and PAO - Work should start as soon as a CRAC notification is received. All documents connected to each other, like purchase orders, invoices, PRC, and CRAC, should be checked to ensure their correctness before the invoice is sent for payment. The payment must be made to the seller within a 10-day timeframe from the date of the CRAC. Any delays beyond this point shall be treated as a violation of compliance as per the GFR rules.

Understanding certificates is just the beginning when you decide to sell on GeM. Registration, catalogue listing, bid participation, vendor assessment, and ongoing compliance all play parts simultaneously.

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The PRC and CRAC discussions are just a fraction of the overall selling success on GeM. The entire picture registration, cataloging, bidding, order management, and payment follow-up calls for regular focus and portal familiarity that most companies don't have within their staff.

Professional Utilities has spent more than 10 years assisting Indian businesses in understanding government compliance. Our GeM advisory team collaborates with sellers and buyers from all over the country, from first-time MSMEs to large manufacturers, and we've seen every type of delay, dispute, and documentation gap.