The objective of introducing discount was to incentivize long term business relationship with major customers so as to have assured and regular business. The discount offered was based on the premise that the cost of booking per consignment goes down with increase in the volume of business.

As a result, based on economies of scale, the Department offered discount on the Speed Post tariff to customers giving us large volume of Speed Post business.

Today, the substantial volume of Speed Post business is received from bulk customers where bulk customer is defined as anyone who provides Rs.10,000 worth of Speed Post business in a month at a Speed Post booking office. The Department in the year 2007, introduced “One India One Rate” in respect of Speed Post articles weighing upto 50 gms. The Department has also computerized the booking and delivery operations of Speed Post in a very large number of offices spread across the country. A number of major National Speed Post Centers have also been technologically upgraded and exclusive Speed Post delivery offices set up.

In view of such developments, it was considered that the current Speed Post discount structure needed a relook. BD&M Directorate collected data from all the circles on Speed Post and examined the Speed Post discount structure as well as the issues related to its operationalization in a comprehensive manner and formulated a new Speed Post discount structure and operational mechanism.

The competent authority has decided to adopt this new Speed Post discount structure and operational mechanism in respect of bulk booking of Speed Post articles as well as EMS articles as elaborated in subsequent clauses of this O.M.

New Speed Post Discount Structure:

1. The customer would have the following options for making payment:
   1. Advance payment.
   2. Payment at the time of booking of Speed Post articles.
   3. Availing credit facility.
2. The bill will be prepared on a monthly basis (calendar month) by the office of posting.
3. Monthly business for deciding upon the rate of discount applicable would be determined by the Speed Post business excluding Service Tax and Education Cess etc.
4. Discount would be applicable on the Speed Post tariff excluding Service Tax and Education Cess etc.
5. The above mentioned discount would be offered to the customers provided that the Speed Post booking data is made available to the Speed Post booking office by the customer in electronic format. In respect of bulk booking data received with a paper manifest only without soft copy, the Speed Post discount amount offered to the bulk customer would be reduced by half.

The operational mechanism of the new Speed Post Discount Structure is elaborated as under:

1. Bulk customer is defined as anyone who provides Rs.10,000 worth of Speed Post business in a calendar month at a Speed Post booking Office.
2. Bulk customer as defined above would be eligible for credit facility provided he enters into an agreement with Department of Posts as detailed in subsequent clauses.
3. The bulk customer would however, be eligible for discount only if the Speed Post business provided by him in a calendar month is Rs.50,000 or more excluding service tax and education cess etc.
4. In case, the bulk customer chooses not to avail credit facility and to make full payment at the time of booking of Speed Post articles, he/she would be eligible for discount of the Speed Post business provided by him in a calendar month is Rs.50,000 or more.
5. The Bulk customer choosing to avail credit facility, would apply to designated authority in the format prescribed at Annex ‘B’ in duplicate (one for the designated authority and one for the approving authority as elaborated in the subsequent paras).
6. The Bulk customer will have to enter into an agreement (in the format given at Annex ‘C’) with the designated authority. The contract will be applicable for a period of one year and the approving authority shall renew the contract on an annual basis.
7. Designated authority to enter into agreement on behalf of the Department for providing BNPL facility for Speed Post service would be as follows:

   Office of Posting	Designated Authority
   Sub office	Divisional Head
   HO/ MDG (up to HSG – I)	Divisional Head
   HO/ GPO (Gr ‘B’ & above)	Head of the office
   RMS Units/ MBCs	Divisional Head
   NSPC/ State SPC (Gr ‘B’ & above)	Manager
   NSPC/ State SPC (Below Gr ‘B’)	Divisional Head

8. The Bulk customer would commit the volume of monthly business to be given by him under Speed Post.
9. The designated authority shall verify the application and would forward both the copies of the application to the approving authority with his/her recommendation.
10. Following authorities have been proposed to be identified as ‘Approving Authority’:
    1. Regional PMsG: All cases falling under his/her region (i.e. the location where BNPL mail of the applicant is generated falls in the jurisdiction of the Region).
    2. CPMsG: All other cases.
11. The approving authority shall examine the application in consultation with his/her financial advisor and would approve/ reject the application and send one copy of the application duly approved/ rejected to the designated authority. The second copy of the application would be retained by the approving authority.
12. The designated authority will thereafter ask for Bank Guarantee from the approved Bulk Customer. The Bank Guarantee (Format at Annex ‘D’) asked should in no case be less than the four months of the business committed by the Bulk customer. (i.e. if a Bulk customer has committed a monthly business of Rs 7,50,000/‐, the Bank Guarantee asked should not be less than Rs 30,00,000/‐).
13. The Bank Guarantee should be valid for a period of at least 18 months from the date of the agreement.
14. The bank guarantee should be issued by a Nationalized or Scheduled Bank.
15. A bank guarantee shall not be necessary if the applicant is a Central/ State Government Ministry/ Department/ Nationalized Bank / Public Sector Undertaking. In such cases, the authorized signatory of the applicant shall furnish an undertaking (Annex ‘E’) that the applicant shall make the full payment of the bills raised by the Department by the due date.
    1. The designated authority shall enter into an agreement with the applicant as per format at Annex ‘C’ and send a copy of the signed agreement for information of the approving authority.
    2. The office of ‘Approving Authority’ would maintain the record of disposal of all such cases received along with copies of agreement entered into by designated authority.
16. The amount of bank guarantee shall be reviewed by the designated authority on a quarterly basis. In case amount of Speed Post booking is found to exceed the amount of Bank Guarantee, designated authority would obtain Bank Guarantee of the additional amount from the Bulk customer.
17. Following would be the office of Billing etc. in respect of various categories of office of postings:

    Office of Posting	Office that prepares the bill	Office that checks the bill & raises the same with customers & maintain & settle the account
    (1)	(2)	(3)
    Sub office	Sub office	Divisional Office
    HO/ MDG (up to HSG – I)	HO/ MDG (up to HSG – I)	HO/ MDG (up to HSG – I)
    HO/ GPO (Gr ‘B’ & above)	HO/ GPO (Gr ‘B’ & above)	HO/ GPO (Gr ‘B’ & above)
    RMS Units/ MBCs	RMS Units/ MBCs	Divisional Office
    NSPC/ State SPC (Gr ‘B’ & above)	NSPC/ State SPC (Gr ‘B’ & above)	NSPC/ State SPC (Gr ‘B’ & above)
    NSPC/ State SPC (Below Gr ‘B’)	NSPC/ State SPC (Below Gr ‘B’)	NSPC/ State SPC (Below Gr ‘B’)

18. The bill will be prepared on a monthly basis (calendar month) by the office of posting.
19. Monthly business for deciding upon the rate of discount applicable would be determined by the Speed Post business excluding Service Tax and Education Cess etc.
20. Discount would be applicable on the Speed Post tariff excluding Service Tax and Education Cess etc. as illustrated in Annex ‘A’.
21. Based on the monthly business given by the Bulk customer, the rate of discount applicable to the Bulk customer may differ on a month to month basis.
22. The bill will be raised by the designated office by 15th day of the following month (Bill date). The Bulk customer shall pay the bill amount in full on or before 30 days from the date of issue of bill (Due Date).
23. In case the customer fails to make the payment by the due date, penalty at the rate of 10% per annum on the amount of the bill shall be imposed by the Department upon the defaulting customer (to be calculated on a daily basis). The penalty will be imposed from the Bill date. (Illustration at Annex ‘F’).
24. No booking of Speed Post consignments will be allowed from the defaulting customer after one month from the due date of the payment of bill till all the pending bills along with the penalty due are paid in full to the Department.
25. In case of non‐payment of bill even after 3 months from the bill date, action will be taken by designated authority for invoking the Bank Guarantee for recovery of the total outstanding amount.
26. However, the Department may accept the booking of Speed Post articles from such defaulting customer on full prepayment of Speed post charges. No discount would be made available on such bookings.
27. The prescribed discount will be applicable to customers who provide the soft copy of their bulk bookings in the format prescribed vide BD&M Dte. O.M. no.51‐09/2009‐ BD&MD dated 13 July, 2009.
28. In respect of bulk bookings that are received with a paper manifest only without soft copy, the amount of discount as offered to the bulk customer, would be reduced to half.
29. The bills raised as well as discount offered would be on the basis of Speed Post articles booked from the identified booking office on a monthly basis. No consolidation of billing of Speed Post business received in multiple offices would be allowed for working out the discount due.
30. The offices of billing would prepare a monthly statement account of Speed Post booking received from bulk Customers in the format at Annex ‘G’ and submit a copy to its Divisional office/ Reporting office with copy endorsed to Regional Postmaster General and Chief Postmaster General. Regional Postmaster General and Chief Postmaster General would review the bulk bookings of the Speed Post articles in their region/ circle through their respective Finance Advise. The Circle office will consolidate the Speed Post booking received from all the bulk Customers in their circle and send a consolidated report to BD&M Directorate as per Annex ‘H’.