Sec 2(32) – continuous supply of goods

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Sec 2(32) – continuous supply of goods 2017-04-14T02:54:32+00:00

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  • AdminAdmin
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    #1143 |

    “continuous supply of goods” means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify;

    Priya MadrechaPriya Madrecha
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    It refers to supply of goods continuously or on recurrent basis under a contract, with periodic payment obligations.
    The following aspects need to be noted:
    •    It should be a contract for supply on a recurrent basis and cannot be a one-time supply contract;
    •    The contract should be a case of periodic billing and periodic payments – viz., the billing and receipts thereto should be on a periodic basis (e.g.: every fortnight; every Monday etc.) and not one-time. Further, the contract should specify this periodicity/ frequency of billing/ payment;
    •    The mode of supply would not be relevant – viz., such supply may be through a wire, cable, pipeline or other conduit or any other mode;
    •    The Government is empowered to notify certain supplies as continuous supply of goods.
    Examples of continuous supply of goods are:
    (a)    Open purchase orders with an understanding of fortnightly billing;
    (b)    VMI (vendor managed inventory) where the agreed periodicity for billing is, say,
    monthly/ fortnightly etc.;
    (c)    Supply of gases through pipeline with a weekly billing schedule;
    (d)    Supply of say, 5 litre water cans on an as and when required basis with a frequency of monthly billing under a contract.

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