Rule 18 of the General Financial Rules 2017 Remission of Revenue

Rule 18 of the General Financial Rules 2017 Remission of Revenue

Visual Summary

Executive Summary

Rule 18 establishes a crucial safeguard for public funds. It states that any money owed to the government (a ‘claim to revenue’) cannot be forgiven (‘remitted’) or given up on (‘abandoned’) without the formal, written approval (‘sanction’) from a specifically authorized official or body (a ‘competent authority’). This rule prevents unauthorized write-offs and ensures that decisions to not collect government dues are made with proper accountability.

In-Depth Analysis of the Rule

Introduction
Government revenue, which includes taxes, fees, and fines, is the lifeblood of public services. Ensuring this money is collected is vital for the functioning of the state. Rule 18 of the General Financial Rules, 2017, provides a clear and simple directive to protect this revenue. It creates a formal process that must be followed before any government department can decide to forgive a debt owed to it.

Breakdown of Key Terms

• Claim to Revenue: This is a broad term for any money that the government is legally entitled to collect. It can be anything from income tax and customs duties to license fees, penalties for rule violations, or rent from government property.
• Remitted or Abandoned: To ‘remit’ a claim means to cancel or forgive the debt, essentially telling the debtor they no longer have to pay. To ‘abandon’ a claim means to stop all efforts to collect the money, even if the debt technically still exists. In both cases, the government forgoes the revenue.
• Save with the sanction of the competent authority: This is the core of the rule. ‘Save with’ means ‘except with’. ‘Sanction’ means formal, official permission. A ‘competent authority’ is not just any government officer; it is a specific person or body that has been legally empowered to make such a decision. The power to forgive government revenue is not widespread and is usually held by senior officials or committees.

Practical Example
Imagine a small company owes the government Rs. 50,000 in a specific fee. Due to a severe flood, the company’s factory is destroyed, and it goes out of business, making it impossible for them to pay. The company’s owners write to the concerned government department, explaining their situation and requesting that the fee be waived. The officer handling the case cannot simply agree and close the file. According to Rule 18, the officer must prepare a detailed report and submit it to the ‘competent authority’ (for instance, a Principal Secretary or a special committee) for a decision. Only if that authority provides a formal ‘sanction’ can the Rs. 50,000 claim be legally remitted. Without this sanction, the debt remains on the books.

Conclusion
Rule 18 is a fundamental principle of financial propriety. It ensures that public money is not given up lightly. By centralizing the power to remit revenue in the hands of specific competent authorities, it creates a system of checks and balances, enhances transparency, and holds the government accountable for the collection of its dues.

Related Provisions

Understanding Rule 18 is enhanced by looking at related rules that build upon its principles. These include rules about reporting such remissions and the general standards of financial conduct.

• Rule 17: Miscellaneous Demands – This rule explains that Accounts Officers must watch the realization of various government demands, which provides context for the types of revenue claims that might be considered for remission under Rule 18.
• Rule 19: Submission of statements of remission and abandonment of revenue – This is a direct follow-up to Rule 18. It mandates that authorities submit annual statements of all revenue remissions they have sanctioned, ensuring transparency and oversight.
• Rule 21: Standards of financial propriety – This rule sets the overarching principles for all financial matters, including the expectation that officers will exercise the same vigilance with public money as a person of ordinary prudence would with their own. This principle guides the competent authority’s decision-making process under Rule 18.

Learning Aids

Mnemonics

• CASA: Claim to revenue Abandoned/remitted Save with Authority’s sanction.
• Remember the phrase: “To forgive a fee, you need the master key.” The ‘master key’ is the sanction from the competent authority.

Mindmap

Multiple Choice Questions (MCQs)

Frequently Asked Questions

Key Takeaways

• Money owed to the government cannot be forgiven without formal, high-level approval.
• A specific ‘competent authority’ must provide a sanction before any revenue claim is dropped.
• This rule is a key control measure to protect public funds and ensure financial discipline.