Para 8.14 — CAM
Original Rule Text
8.14 SETTLEMENT OF TRANSACTIONS BETWEEN CENTRAL GOVERNMENT AND STATE GOVERNMENTS
8.14.1 Monetary settlement will not be resorted for claims up to ₹ 1000 in each case, for transactions on account of supplies made or services rendered by one Government to another. However, for the claims relating to commercial departments/undertakings of a Government, monetary settlement will be carried out, irrespective of the amount involved. The settlement in both the cases will be made through cheque payment or any other mode authorised the Government from time to time.
8.14.2 The procedure for monetary settlement in these cases, for supplies/services to a Central Government Department including Defence, Railways, Posts and Telecommunications besides Civil Ministries will be as given below:
8.14.3 For the settlement of claims, the Central Government Department that received the supplies or services will present a bill along with the accepted invoice to its own Pay and Accounts Officer. The Pay and Accounts Officer will make the payment by cheque or any other mode authorised by the Government from time to time to the concerned officer of the Government that made the supply or provided the services.
8.14.4 In the reverse case, where a Central Government Department rendered the supplies or services, the payment received from the State Government through authorised mode will be credited to the proper head of account.
Note: Ministry of Finance, DEA O.M. No. F.1(57)-B/74 dated12.10.1976 also lays down the procedure to be followed for settlement of inter-governmental transactions. This is for inter - governmental transactions
(i) between State Governments inter-se,
(ii) between State Government on the one hand and Central Government-Railways, Defence, P&T, Civil Ministries/Departments on the other and
(iii) between Central Civil Departments/Ministries on the one hand and Railways/Defence/Posts and Telecom Departments on the other. It provides for an additional permissible method of settlement, in cases where the debit does not originate in the books of the concerned Pay and Accounts Officers. However, in all cases where the debit for the supply and services (ii and iii above), originate in the books of a Pay and Accounts Officer, he shall raise the debit against the PAO of the department that received the supplies. The Pay and Accounts Officer of the department receiving the supplies shall effect necessary settlement by issue of cheque. The prescribed procedure of cash settlement between the executive authorities concerned shall not be applicable in such cases.
What This Means
This paragraph governs the settlement of financial transactions between the Central Government and State Governments. Claims up to Rs. 1,000 per case for supplies or services are written off — no monetary settlement is made. However, for commercial departments/undertakings, settlement is mandatory regardless of the amount. Payments are made through cheques, and the settlement follows prescribed timelines. The paragraph covers various scenarios including recoveries of licence fees from State Government employees in Central quarters, postal charges, and the accounting of transactions that arise when one government provides services or supplies to another.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Claims up to Rs. 1,000 per case for non-commercial supplies/services are not settled
- 2Commercial department claims are settled regardless of amount
- 3Settlement through cheque payment to the concerned government
- 4Covers licence fees, postal charges, and inter-government supplies
- 5Both governments must reconcile and settle claims within prescribed timelines
Practical Example
The Central Government's CPWD provides maintenance services worth Rs. 800 to a State Government building. Since the claim is below Rs. 1,000, no monetary settlement is pursued. However, if the Government of India Press supplies printed material worth Rs. 800 to a State Government on a commercial basis, the settlement is mandatory because it involves a commercial undertaking, and the State Government must remit payment by cheque.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why are small claims under Rs. 1,000 not settled?▼
How are licence fee recoveries from State Government employees handled?▼
Does the Rs. 1,000 exemption apply to commercial departments?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.