FREQUENTLY ASKED QUESTIONS (FAQs)
QUESTIONS

NEW INTRODUCTIONS
+ What procedures must a company follow in order to introduce new products in CSD?
+ When is an Initial Order placed for New Introduction and when is a Repeat Orders placed?

REGISTRATION OF NEW URC
+ What procedures must be followed in order to register a new Unit Run Canteen (URC)?
+ What procedures must be followed in order to apply for a URC loan?

BANK GUARANTEE FROM SUPPLIER
+ How can queries relating to F&A branch be addressed?
+ What is a Bank Guarantee and why is it required?
+ What is the specified amount for a BG?
+ What is the process for renewing an expired BG?
+ Can a BG be exempted?
+ What is the importance of submitting new/additional/extended Bank Guarantee (BG)?

PRICE REVISION
+ How long after a new products is introduced in CSD can an application be made for price revision?
+ When and how often can a firm revise the price of an item listed with CSD?

DELIVERY SCHEDULES
+ What are the delivery schedules for regular purchase orders issued by CSD?
+ Is there any delivery extension granted for supplies made beyond the delivery schedule specified in the order?
+ What are the modes of delivery to CSD stores?

ALTERATIONS IN PRODUCTS SPECS
+ What are the procedures to be followed in case of alteration in grammage/nomenclature/graphic design/ formulation/case pack etc?

AGAINST FIRM DEMAND (AFD)
+ Can I purchase all models of AFD-I items (TV, refrigerator, AC etc) through CSD Depots? A new bike /car/television/refrigerator model was launched yesterday. Can I buy it through CSD? If not, how long will it take for the item to become available through CSD?
+ How often can I buy a new television/refrigerator/washing machine etc?
+ I am an Ex-Serviceman - am I eligible to buy a 4 wheeler through CSD?
+ What are the conditions for purchasing a 4 wheeler through CSD?
+ Are all military personnel entitled to purchase 2 wheelers?
+ Do I need any special sanctions in order to purchase a 2 or 4 wheeler? If so, how do I obtain them?
+ Why does the same item have differing costs in different CSD depots?
+ Are tax benefits available to CSD customers in all states?
+ Which states offer full tax exemption on VAT?

ANSWERS
NEW INTRODUCTIONS

What procedures must a company follow in order to introduce new products in CSD?
A SIMPLE FIVE STEP PROCEDURE IS REQUIRED TO INTRODUCE PRODUCTS IN CSD:
The company must fill out the application form for the introduction of an item, available here (Link to www.csdindia.gov.in) and submit it, together with the application fee. CSD charges an application fee of Rs 15,000 per SKU or Rs 3,000 per SKU in case of ex-servicemen enterprises. This amount is non-refundable and must be paid through a demand draft in favour of the Canteen Stores Department Public Fund Account (Main). The company can apply for a maximum of eight SKUs in one application.

A registration number will then be allotted to the application and a preliminary evaluation will be conducted. At this stage, CSD may request the company for certain clarifications and queries.

Once the documentation is complete, the file will be submitted to the Preliminary Screening Committee (PSC), together with samples of the product(s). The Committee is generally convened every alternate month.

The decision of the Committee will be communicated to the company via mail as well as through the website. Once the Committee shortlists the product, further evaluations will be conducted. These include, among others, a market survey, an inspection of the factory or warehouse and hygiene inspections for food and beverage items.

Once this evaluation audit has been completed, the firm will have to conduct price negotiations with CSD. The Board Of Administration (BOA) will then give the final approval. Once all formalities have been completed, the final files are sent to concerned store branches for issuance of the New introduction circular and initial order.


When is an Initial Order placed for New Introduction and when is a Repeat Orders placed?
After receipt of Bank Guarantee (if applicable) for the amount specified in the New Introduction circular along with the acceptance letter of the circular, hard/soft copy of jpeg of the products being introduced, the Initial Order will be placed with 60 days delivery time.

Repeat Order is placed one month after successful execution of the Initial Order. For this the supplier has to submit additional Bank Guarantee (if applicable), for the amount equal to the Initial Order for the Stores Branch to consider placement of Repeat Order having 60 days delivery time. This will be subject to receipt & liquidation of Initial Order quantity at CSD Depots.

No Repeat Order will be placed by the CSD for the item introduced under LS Ordering.


REGISTRATION OF NEW URC

What procedures must be followed in order to register a new Unit Run Canteen (URC)?
TO QUALIFY FOR REGISTRATION A URC MUST HAVE A MINIMUM POSTED STRENGTH OF 100 PERSONNEL. IF THIS REQUIREMENT IS MET THE URC CAN REGISTER THROUGH THREE SIMPLE STEPS:

Application should be made on a prescribed form for a new URC registration available from the URC manual or on the website (Link www.csdindia.gov.in). The manual is available at all URCs.

The application form must be forwarded duly recommended by Higher formations, accompanied by a Statement of Case (SoC).

The completed application forms will be forwarded to O/o DDGCS Dte, Delhi for approval, after which a registration number will be issued by the Secretariat Branch, CSD, HO.

The AGM (Secy), CSD, HO must be contacted immediately in case of the following:
• movement of unit
• renaming of unit
• Re-designation
• Disbandment


What procedures must be followed in order to apply for a URC loan?
To apply for a URC loan, download the application form here (Link - www.csdindia.gov.in). For a list of requisite documents, visit our website www.csdindia.gov.in
Loans up to Rs 2 lakh are sanctioned by the CSD General Manager (GM).
Loans from Rs 2 lakhs - 5 lakhs are sanctioned by the Board of Administration (BOA), which is usually convened every alternate month.
Loans from Rs 5 lakhs - 25 lakhs are sanctioned by the Quarter Master General (QMG) based on the BOA's recommendations.
The loan will be available in the form of stores only. No separate cheques will be issued.
Loans are to be repaid by URC within five years.
The loan attracts an interest rate of 4.5% for the first loan and 6.5% for the second loan.


BANK GUARANTEE

How can queries relating to F&A branch be addressed?
All queries related to the F&A branch should be mailed to aaocoord@csdindia.gov.in. In case the issue does not get resolved, an appointment may be sought by the supplier.

What is a Bank Guarantee and why is it required?
CSD collaborates with partners across the country in order to procure consumer supplies from them in bulk. The supplies are sent to CSD depots which then deliver these products to thousands of URCs across the country, as per their requirements.

The products are procured by the CSD from suppliers against payment made from Government Public Funds allocated for the purpose.

A bank guarantee acts as a promise from a bank that the liabilities of a debtor will be met in the event of failure to fulfill contractual obligations. Thus, suppliers provide a BG to CSD as a safeguard against substandard/defective/non-moving stock. The BG restricts the ordering quantity so that the value of stocks held in the inventory including orders, does not exceed the BG amount. These measures are taken in order to ensure that there are no bad debts in respect of any suppliers, thereby leading to loss of government funds.

What is the specified amount for a BG?
The Bank Guarantee from the supplier must be equal to the total value of initial order as worked out by CSD. However, after consideration of the product's sales patterns, the amount may be increased or decreased. This can take place only after prior approval from the respective store. The total amount should cover the stock held, stock in transit i.e. dues in and stock on order.

What is the process for renewing an expired BG?
The CSD's F&A branch, together with the concerned store, will provide details regarding renewal/extension of the BG to the supplier and bank. This will be done at least three months prior to the date of expiration. All payments will remain on hold until the BG has been renewed.
In case the BG is not renewed, CSD will issue an intimation to the bank to invoke the BG. This will be done seven days before its expiration date.

Can a BG be exempted?
The firm may request an exemption of the BG only if it fulfills the following criteria:
• If the company has been supplying goods to CSD for a minimum period of five years.
• If the annual turnover of the preceding five years was at least Rs five crores. Hence, the average turnover for the preceding five years should be more than Rs 25 crores.
• If the turnover of the firm was more than Rs five crores per year in the previous two years.
• There should not have been any occasion of the stocks being returned to the suppliers in the previous three years, necessitating invoking of BG, if any.

Ex-servicemen enterprises may request an exemption of the BG only if they fulfill the following criteria:
• If the firm has been supplying goods to CSD for a minimum period of five years.
• If the annual turnover of the preceding five years was at least Rs 2.5 crores. Hence, the average turnover for the preceding five years should be more than Rs 12.5 crores.
• If the turnover of the firm was more than Rs 2.5 crores per year in the previous two years.
• There should not have been any occasion of the stocks being returned to the suppliers in the previous three years, necessitating invoking of BG, if any.

What is the importance of submitting new/additional/extended Bank Guarantee (BG)?
The order quantities for the items under Bank Guarantee are generated within the limit of BG amount available with the Department. In case new/additional/extended Bank Guarantee are not received at Stores Branch on or before 05th of the month, the same cannot be considered in the current month PRGO review for generating order quantity for its value.
Any extended BG should be submitted at Stores Branch 90 days before the expiry of BG, failing which further orders for the index will not be placed till receipt of the extended BG.
Notwithstanding the above, F&A branch will act to stop payment and the Banker will be approached for encashment of the BG.
Therefore, all suppliers are advised to be proactive in submission of the BG.


PRICE REVISION

How long after a new products is introduced in CSD can an application be made for price revision?
Price revision can be applied for one year from the date of New Introduction circular.

When and how often can a firm revise the price of an item listed with CSD?
Any firm can apply for price revision of a listed item one year after the date on the New Introduction circular. This revision will be sub-ject to an upward revision in MRP of the time, in the civil market. However, there is no time limit when it comes to a downward revi-sion of price; the change will come into effect, retrospectively.

The firm can apply for price revision twice a year. There should be a period of three months minimum between the date of the latest application and the date of the last price revision of the item.

The CSD will then evaluate the application. The process may involve price negotiations with the supplier. A minimum of ninety days from the date of receipt of application will be taken, after which the revised amount will be applicable at stores. This is subject to availability of the item during the market survey. CSD follows the First-in First-Out (FIFO) system to dispose of the applications received, subject to all documents being in order.

As per the agreed terms with CSD, companies must continue to supply items at earlier rates until the price revision has been approved. Failure to do so will result in penalty and deletion of the item from the CSD inventory.


DELIVERY SCHEDULES

What are the delivery schedules for regular purchase orders issued by CSD?
The delivery schedules for monthly supply of items are as follows:

• Regular Order—Ex-Base Supply
01st to 20th of the Month

• Regular Order—Direct Supply
01st to 27th of the Month

• Local Supply Order—Direct Supply
21 days from the date of the order.


Is there any delivery extension granted for supplies made beyond the delivery schedule specified in the order?
Yes, but it comes with a penalty @ 2% of the invoice value for the first fifteen days from the last date of delivery specified in the order.
Orders delayed beyond fifteen days stands cancelled and no supplies can be effected against that order. This penalty will be imposed for full/part non-supply.

What are the modes of delivery to CSD stores?
There are two methods of delivery to CSD stores:
Ex-Base Depot: Suppliers without clearing and forwarding agents (C&FA) in each state, can supply items to the Ex-Base depot in Mumbai. Freight rebate will be applicable on this. The initial freight rebate will be decided during the PNC; it will be increased annually with effect from 1st April, based on the current market rates and carrying load/value. This mode of delivery is applicable for the HO order items only.
Direct Supply: Suppliers with C&FAs in each state, can supply items directly to all CSD depots i.e. via Direct Supply (i.e F.O.R: Destination (Door Delivery). Freight Rebate will not be applicable on this. This mode of delivery is applicable for the HO & LS Orders. In case the firm changes its C&FA, it needs to immediately notify the Stores branches. The branches will then approve the change after evaluating its cost benefit to the CSD consumer.


ALTERATIONS IN PRODUCTS SPECS

What are the procedures to be followed in case of alteration in grammage/nomenclature/graphic design/ formulation/case pack etc?
The supplier must constantly ensure the parity in quality of products supplied to CSD and to the civil market. CSD strongly urges its suppliers to notify them well in advance in case of changes in grammage/nomenclature/graphic design/ formulation/case pack etc of the product.
The firm must submit an application clarifying the change, together with the requisite documents for according approval for the changes. Once the stores' branches have given their approval, the item in question must also be supplied to all CSD depots. Any deviation will attract penalty as per departmental policy.


AGAINST FIRM DEMAND (AFD)

Can I purchase all models of AFD-I items (TV, refrigerator, AC etc) through CSD Depots?
No, only models listed in CSD are available through CSD.

A new bike/car/television/refrigerator model was launched yesterday. Can I buy it through CSD? If not, how long will it take for the item to become available through CSD?
All items available in CSD stores go through a strict evaluation process to ensure quality and optimum pricing. Unfortunately, this means that newly-launched products will not be immediately available through CSD. However, the item will be available in CSD stores after a minimum time period of three to four months.

How often can I buy a new television/refrigerator/washing machine etc?
All CSD consumers can purchase these items once in three years.

I am an Ex-Serviceman - am I eligible to buy a 4 wheeler through CSD?
Yes, CSD welcomes the patronage of ex-servicemen under certain conditions.

What are the conditions for purchasing a 4 wheeler through CSD?
The following conditions must be met for purchasing a 4 wheeler through CSD:

Are all military personnel entitled to purchase 2 wheelers?
Certainly, CSD offers 2 wheelers to every category of the Armed Forces. However, a 2 wheeler can only be purchased every three years.

Do I need any special sanctions in order to purchase a 2 or 4 wheeler?
If so, how do I obtain them? For the convenience of the CSD consumer, no sanction has been placed on the purchase of 2 wheelers. The centralised Car sanction by CS Dte has been discontinued w.e.f. 20 Jul 2015.

Why does the same item have differing costs in different CSD depots?
Unfortunately, CSD is unable to keep costs consistent throughout the country due to differing tax structures of different states.

Are tax benefits available to CSD customers in all states?
Unfortunately, tax benefits are not available in all states. Some states have granted full exemption while others have given certain concessions.

Which states offer full tax exemption on VAT?
The states of Gujarat, Tamil Nadu, Jharkhand and Uttar Pradesh have granted full tax exemption to CSD while the Punjab, Haryana, Madhya Pradesh etc have granted certain tax concessions.