Rule 28 — GAR
Original Rule Text
28. Classification of transactions in accounts
(1) Under. Article 150 of the Constitution, the accounts of the Union and of the States shall be kept in such form as the President may on the: advice of the Comptroller and Auditor General, prescribe. The word "Form" used in. Article 150 has a comprénensive meaning so as to include the prescription not only of the broad form in which the accounts are to be kept but also the basis for selecting appropriate heads under which the transactions are to be classified.
(2) The estimates of receipts and expenditure framed by Government or in any: order of Appropriation shall indicate provisions, ordinarily against heads opened in conformity with these rules. Where there is divergence, the corresponding receipt or expenditure shall be brought to account under the: appropriate major head or minor head or other unit of classification as determined by the President on the: advice of the Comptroller and Auditor General of India.
Principles and Rules regulating adjustments between Governments of certain category of charges and receipts, which have been accepted by all Governments are given in Appendix 5."
What This Means
Rule 28 addresses the constitutional foundation for how government accounts are classified. Under Article 150 of the Constitution, the accounts of the Union and the States must be kept in the form that the President prescribes on the advice of the Comptroller and Auditor General of India. The rule clarifies that 'form' here is a comprehensive term — it includes not just the physical layout of accounts but also the rules for deciding which head of account each transaction should be classified under.
The practical implication is that Budget Estimates and Appropriation Orders should indicate provisions against heads that conform to these classification rules. However, situations can arise where the head used in a budget or appropriation order does not match the correct accounting head. In such cases, the actual receipt or expenditure must still be brought to account under the correct major or minor head as determined by the President on CAG's advice — not under a wrong head simply because that is what the budget used. In other words, the budget documents follow the accounting rules, not the other way around.
The rule also notes that the principles and procedures governing adjustments between different governments (Central Government, State Governments, and Union Territory Administrations) for certain categories of charges and receipts — arrangements accepted by all governments — are set out in Appendix 5 of the Government Accounting Rules.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Article 150 of the Constitution is the legal basis for prescribing the form of government accounts; the President prescribes this form on the advice of the CAG.
- 2'Form' under Article 150 is comprehensive — it includes the basis for classifying transactions under specific heads, not just the physical layout.
- 3Budget Estimates and Appropriation orders should use heads that conform to GAR classification rules.
- 4Where a budget or appropriation uses a divergent head, the actual receipt or expenditure must still be booked under the correct accounting head as determined by the President/CAG.
- 5Appendix 5 of GAR contains inter-governmental adjustment principles accepted by all governments.
- 6This rule reinforces that accounting classification is legally grounded in the Constitution and cannot be overridden by administrative convenience.
Practical Example
The Ministry of Science and Technology presents its Budget Estimates using a composite head that combines two activities into one for presentation convenience. However, when actual expenditure occurs, the PAO responsible for accounting notes that the correct heads — as prescribed in the List of Major and Minor Heads — require these two activities to be shown under separate minor heads. Following Rule 28, the PAO books the expenditure under the correct prescribed heads, not under the composite head used in the budget. A reconciliation note is prepared explaining the divergence between the budget head and the accounting head, ensuring transparency without compromising classification integrity.
Similarly, when the State of Uttarakhand makes a payment to the State of Uttar Pradesh for services rendered in connection with a shared irrigation project, the adjustment is governed by the inter-governmental principles in Appendix 5 — both states use the prescribed classification, and the settlement is made through the prescribed procedure to avoid double-counting or misclassification in either state's accounts.
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.