Rule 2 - Delegation of Write-Off Powers | KartavyaDesk
Original Rule Text
2. Department of Revenue may further re-delegate the powers relating to write off of losses of revenue to officials in accordance with procedures/ instructions issued by that Department. 3. Ministries/Departments other than Department of Revenue may re-delegate powers of write off upto Rs.5000 in each case of loss of revenue to HoDs. 4. In case of irrecoverable loss of stores and public money, the power to write off may be delegated to HoD through a written order by the original authority having such power, subject to such delegation not exceeding 10% of the power of the Department. 5. In case of Deficiencies and depreciation in the value of stores (other than motor vehicles or motor cycle) included in the stock and other accounts, the power to write off may be delegated to HoD through a written order by the original authority having such power, subject to such delegation not exceeding 10% of the power of the Department. 6. For the purpose of deciding the value of the stores, it shall be the “book value” where priced accounts are maintained and “replacement value” in other cases. 7. Value in “each case” to be reckoned with reference to the total value of stores to be written off on one occasion. 8. The term “each case” used in this table in regard to write-off of irrecoverable losses of stores, deficiencies and depreciation in the value of stores included in stock and other accounts, should be interpreted with reference to a given point of time. If, on a particular occasion, a number of items of stores are to be written off, the powers of the sanctioning authority should be reckoned with reference to the total value of stores intended to be written off on that occasion and not with reference to individual articles constituting the lot. In this context, losses arising out of one incident should not be split up and written off separately on different dates in order to avoid sanction of the higher authority. Losses due to one specific cause like fire, theft, flood, etc., should be written off at one time only. There is, however, no objection to losses arising out of more than one cause being written off at one time. The competence of the officer writing off the loss will depend on the amount written off each time.
What This Means
Rule 2 of the Delegation of Financial Powers Rules, 1978, deals with the re-delegation of powers related to writing off losses, specifically concerning revenue, stores, and public money. Essentially, it allows departments and heads of departments (HoDs) to further delegate their authority to write off certain losses, within specific limits and conditions. This helps streamline the process of dealing with minor losses without requiring approval from higher authorities every time. The Department of Revenue has special provisions for re-delegating powers related to revenue loss write-offs, following its own internal procedures. Other departments can re-delegate powers to write off up to Rs. 5,000 of revenue loss to their HoDs. For losses of stores or public money, or deficiencies in store value, the re-delegation to the HoD cannot exceed 10% of the department's original write-off power. This rule also clarifies how the value of stores should be determined for write-off purposes and how 'each case' should be interpreted when dealing with multiple items or incidents.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •Department of Revenue has specific powers to re-delegate authority for writing off revenue losses.
- •Ministries/Departments (excluding Revenue) can re-delegate write-off powers up to Rs. 5,000 for revenue loss to HoDs.
- •Re-delegation for losses of stores/public money or deficiencies in store value to HoDs is capped at 10% of the department's original power.
- •The 'book value' is used for priced accounts, and 'replacement value' for others, when determining the value of stores for write-off.
- •Losses from a single incident (e.g., fire, theft) should be written off together, not split into separate dates to avoid higher authority approval.
Practical Example
The Department of Agriculture has the power to write off up to Rs. 1,00,000 of irrecoverable losses of stores. Under Rule 2, the Director, Mr. Sharma, can issue a written order delegating the power to write off up to Rs. 10,000 (10% of Rs. 1,00,000) to the Head of the Seed Division, Ms. Verma. Later, a batch of seeds worth Rs. 8,000 is damaged due to improper storage in the Seed Division. Ms. Verma, having the delegated power, can now write off this loss without needing approval from Mr. Sharma. However, if the loss was Rs. 12,000, Ms. Verma would need Mr. Sharma's approval as it exceeds her delegated limit.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What does 'book value' mean in the context of store write-offs?▼
Can losses from different incidents be written off together?▼
What is the limit for re-delegating write-off powers for revenue losses to HoDs in departments other than the Department of Revenue?▼
How is 'each case' defined when writing off multiple items of stores?▼
If a department has the power to write off Rs. 50,000, what is the maximum amount they can delegate to the HOD for irrecoverable losses of stores?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Test Your Knowledge
Question 1 of 3
According to the Delegation of Financial Powers Rules, 1978, which department has the authority to further re-delegate powers relating to the write-off of revenue losses based on its own procedures and instructions?
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