Rule 12 — GAR
Original Rule Text
12. Cash balances held in the treasuries of the Central Government form part of the Consolidated Fund, Contingency Fund and the Public. Account of India. Such treasuries exist in those Union Territories whose accounts have not been separated from audit: and continue to be compiled by the: Comptroller and. Auditor General of India. Transactions on behalf of State Governments arising in these treasuries shall be classified in the treasury accounts under the head "8658 - Suspense Accounts - Suspense Accounts (Civil) - Accounts with Accountant General and settled in cash by exchange of cheques/demand drafts as the case may be. (Refer Correction Sipl)
NOTE:- At present the settlement of thet transactions by exchange of cheques/demand drafts is resorted to in cases where the transactions taking place in a Union Territory accredited to an Accountant General are: adjustable against the cash balances of a: State, whose accounts are maintained by: another Accountant General. These transactions are initially taken in the Central: Section of accounts under. the head '8685 Suspense Accounts Cash Settlement: Suspense Account'.
Transactions of the other Governments, including Central Government in State
# Treasuries
What This Means
Rule 12 deals with Central Government treasuries — a relatively narrow category that exists only in Union Territories whose accounts have not been separated from CAG audit. These are Union Territories where the treasury system (rather than the banking channel) is still in use. Cash balances in these Central treasuries form part of the Consolidated Fund, Contingency Fund, and Public Account of India.
When State Government transactions occur at these Central treasuries, they must be separately classified and settled. The mechanism is: such transactions are initially booked in the Central treasury accounts under the suspense head '8658 - Suspense Accounts - Suspense Accounts (Civil) - Accounts with Accountant General', and then settled in cash by exchange of cheques or demand drafts between the relevant accounts offices.
This rule addresses a transitional arrangement — as more Union Territory accounts are separated (moving to the banking/departmentalised system), the scope of Rule 12 shrinks. The note clarifies that when a UT accredited to one Accountant General processes a transaction adjustable against a State whose accounts are with another Accountant General, the settlement is first booked under '8685 - Cash Settlement Suspense Account' before final clearance.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Central Government treasuries exist only in Union Territories whose accounts have not been separated from CAG audit.
- 2Cash balances in Central treasuries form part of the Consolidated Fund, Contingency Fund, and Public Account of India.
- 3State Government transactions in Central treasuries are classified under suspense head '8658 - Suspense Accounts'.
- 4Settlement of such transactions is made by exchange of cheques or demand drafts.
- 5The transitional suspense head '8685 - Cash Settlement Suspense Account' is used for cross-Accountant General adjustments.
- 6This rule applies to a limited and shrinking set of Union Territories that still use the treasury system.
Practical Example
Consider a Union Territory (say, a small UT still under the old treasury system) where a State Government employee presents a travel claim at the local Central treasury. The treasury pays the claim from its cash balance, which is part of the Consolidated Fund of India. This transaction is initially classified under Major Head 8658 (Suspense) in the Central section of the treasury accounts. Subsequently, the Accountant General raises a debit advice to the relevant State Government for settlement, and the State settles by issuing a demand draft or cheque to clear the suspense head.
If the UT is accredited to Accountant General Hyderabad but the transaction involves the Andhra Pradesh Government (whose accounts are with a different Accountant General), the transaction first goes through '8685 - Cash Settlement Suspense Account' before final reconciliation between the two Accountants General.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
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This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.