Rule 310 of The General Financial Rules 2017 Transfer of Land and Buildings
Original Rule Text
Visual Summary
Land transfers between government departments are on a ‘no profit no loss’ basis.
Land and building transfers involving Public Sector Undertakings are at ‘market value’.
Buildings and superstructures are transferred at depreciated cost.
Executive Summary
Rule 310 of the General Financial Rules, 2017, outlines the principles for transferring land and buildings between various government entities. It mandates a ‘no profit no loss’ basis for transfers between Union Territories and Central Government Departments, or between different Central Government Departments. This principle allows for mutually agreeable terms, including exchange of land or payment for acquisition cost. For buildings and superstructures, the transfer is based on present-day cost minus depreciation. Transfers involving Public Sector Undertakings are to be conducted at ‘market value’. Finally, transfers between the Union and State Governments are governed by specific Articles of the Constitution and related instructions in Appendix 7.
In-Depth Analysis of the Rule
Introduction: Rule 310 provides a comprehensive framework for the transfer of land and buildings within the governmental ecosystem, ensuring clarity and fairness in transactions between different entities. It distinguishes between various types of transfers, applying different valuation principles based on the parties involved.
Breakdown of the Rule:
- Rule 310(1) & (2) – Internal Government Transfers: These sub-rules stipulate that transfers of land between a Union Territory and a Central Government Department, or between any two Central Government Departments, must occur on a ‘no profit no loss’ basis. This doesn’t imply zero cost but allows for mutually agreeable terms, such as exchange of land, payment of land value, or cost of acquisition.
- Rule 310(3) – Valuation of Buildings: When buildings and superstructures are transferred, their valuation is based on the present-day cost minus depreciation. The Central Public Works Department is responsible for providing this valuation at the time of transfer.
- Rule 310(4) – Public Sector Undertakings: Transfers of land and recovery of building costs involving Public Sector Undertakings (PSUs) are to be conducted at ‘market value’, as further defined in Appendix 7. This ensures commercial fairness in transactions with entities operating under a more commercial mandate.
- Rule 310(5) – Union and State Government Transfers: Transfers of land and buildings between the Union Government and State Governments are governed by specific constitutional provisions (Articles 294, 295, 298, and 299) and detailed subsidiary instructions outlined in Appendix 7.
Practical Example: Imagine the Ministry of Defence needs a parcel of land currently held by the Department of Posts in a Union Territory. According to Rule 310(1) and (2), this transfer would occur on a ‘no profit no loss’ basis. If there’s a building on this land, its value would be determined by its present-day cost minus depreciation, as per Rule 310(3). The Ministry of Defence might compensate the Department of Posts for the acquisition cost of the land and the depreciated value of the building, rather than paying a market-rate profit.
Related Provisions
To fully understand the context of land and building transfers, consider these related provisions:
- Rule 309 of The General Financial Rules 2017 Sale of Government Land: This rule addresses the sale of government land, requiring prior sanction from the Government.
- Appendix 7 of The General Financial Rules 2017 Transfer of Land and Buildings between Union and State Governments: Provides detailed instructions and principles for transfers between Union and State Governments, including market value definitions.
- Rule 294 of The General Financial Rules 2017 Succession to Property and Assets: Outlines the vesting of property and assets in the Union and corresponding States from the commencement of the Constitution.
Learning Aids
Mnemonics
- Transfers: Types, Terms, Thresholds. Remember the three ‘T’s for Rule 310’s different transfer scenarios.
- No Profit No Loss for Internal Government (NPNL IG): Helps recall the principle for transfers between government departments.
Process Flowchart
Multiple Choice Questions
1. According to Rule 310 of the General Financial Rules, 2017, what is the basis for transferring land between a Union Territory and a Central Government Department?
- A) Market value
- B) No profit no loss basis
- C) Cost of acquisition plus 10% profit
- D) Negotiated value with external auditors
Show Answer
Correct Answer: B) No profit no loss basis
2. How are transfers of buildings and superstructures valued under Rule 310(3) of the General Financial Rules, 2017?
- A) At their original purchase price
- B) At market value
- C) At present-day cost minus depreciation
- D) Based on future potential value
Show Answer
Correct Answer: C) At present-day cost minus depreciation
3. For transfers of land to Public Sector Undertakings, Rule 310(4) of the General Financial Rules, 2017, specifies the valuation basis as:
- A) No profit no loss basis
- B) Book value
- C) Market value
- D) Acquisition cost
Show Answer
Correct Answer: C) Market value
4. What does ‘no profit no loss’ basis for land transfer under Rule 310 of the General Financial Rules, 2017, explicitly NOT mean?
- A) Transfer at zero cost
- B) Transfer based on mutually agreeable terms
- C) Transfer in exchange for equal value land
- D) Payment of cost of acquisition
Show Answer
Correct Answer: A) Transfer at zero cost
5. Transfers of land and buildings between the Union and State Governments are regulated by which provisions, according to Rule 310(5) of the General Financial Rules, 2017?
- A) Only by mutual agreement between the governments
- B) Articles 294, 295, 298, and 299 of the Constitution and Appendix 7
- C) The latest market valuation reports
- D) Decisions of the Central Public Works Department
Show Answer
Correct Answer: B) Articles 294, 295, 298, and 299 of the Constitution and Appendix 7
Frequently Asked Questions
What does ‘no profit no loss’ mean for land transfers under Rule 310?
It means the transfer is not necessarily at zero cost, but rather on mutually agreeable terms such as exchanging land of equal value, or payment for the cost of acquisition, avoiding any profit generation for the transferring entity.
How are buildings valued during transfer as per Rule 310?
Buildings and superstructures are valued at their present-day cost minus depreciation. This valuation is typically obtained from the Central Public Works Department.
Does Rule 310 apply to transfers between the Union and State Governments?
Yes, Rule 310(5) specifically states that such transfers are regulated by Articles 294, 295, 298, and 299 of the Constitution, along with subsidiary instructions in Appendix 7.
Key Takeaways
- Transfers of land between internal government entities (UT to CG Dept, or CG Dept to CG Dept) are based on a ‘no profit no loss’ principle.
- ‘No profit no loss’ allows for various mutually agreeable terms, not necessarily zero cost.
- Buildings and superstructures are transferred at their present-day cost minus depreciation.
- Transfers involving Public Sector Undertakings are conducted at ‘market value’.
- Union-State government transfers are governed by specific Constitutional Articles and Appendix 7.
Conclusion
Rule 310 is fundamental for orderly and equitable asset management within the government. By clearly defining valuation principles and transfer mechanisms for different types of entities, it ensures transparency, prevents undue financial gains or losses, and provides a structured approach to the movement of land and building assets, thereby supporting efficient public administration.