Rule 41 — GAR
Original Rule Text
41. Adjustments with Foreign Governments, outside bodies, etc.
Unless exempted by Government by: general or: special orders, services shall not be rendered without being paid for to any foreign Government or non-govermment body or institution or to a: separate fund constituted as such. Any relief in respect of payment for: services rendered or supplies made: to any: outside body or fund should ordinarily be given through a grant-in-aid rather than by remission of dues.
What This Means
Rule 41 establishes the principle that the government should not provide free services to entities outside the government — specifically, foreign governments, non-government bodies or institutions, and separate funds. Unless the Government has specifically exempted a particular case or class of cases through a general or special order, services must be paid for. A foreign country's embassy needing government printing services, an NGO using a government laboratory, or a private institution using government land — all of these would ordinarily need to pay the market or prescribed rate for the service.
The rule also provides important guidance on how to give relief without compromising this principle: if the Government wants to benefit an outside body, that benefit should flow through a grant-in-aid rather than through the remission (writing off) of dues. This keeps the accounting transparent. If an NGO does important public health work and deserves government support, the correct approach is to give it an explicit grant (which appears in the accounts as an expenditure on social policy) rather than to supply it with government laboratory services for free (which would be an invisible subsidy that does not appear in any accounts).
The rule reflects a broader public finance principle: government resources have a cost, and that cost should be made visible in accounts. Free services to outside bodies are a form of hidden expenditure — treating them as recoverable charges and then explicitly remitting them through grants-in-aid ensures full transparency.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Services must not be rendered free to foreign governments, non-government bodies/institutions, or separate funds unless specifically exempted by Government order.
- 2The general rule is: outside entities pay for government services unless there is an explicit exemption order.
- 3If relief (i.e., not charging) is desired, it should be given through a formal grant-in-aid, not through remission of dues.
- 4This approach ensures that benefits to outside bodies appear transparently in accounts as grants-in-aid expenditure rather than as invisible fee waivers.
- 5Both general orders (covering classes of cases) and special orders (for individual cases) can grant exemptions.
- 6Separate funds constituted as such are also included — even internal government funds must pay for services received from government departments.
Practical Example
The Indian Council of Medical Research (ICMR) — a non-government registered society that receives substantial government funding — requests the Central Government Printing Press to print 50,000 copies of its annual health survey report. The printing cost would ordinarily be Rs. 12 lakh.
The accounts officer at the Printing Press correctly notes that ICMR is a non-government body and Rule 41 requires that it pay for the service. ICMR may not assume the printing is free simply because it receives government grants. The Printing Press raises a bill of Rs. 12 lakh to ICMR. Separately, if ICMR's work is considered important enough for the government to subsidise, the Ministry of Health can provide a grant-in-aid of Rs. 12 lakh to ICMR specifically for publication costs. ICMR then pays the Printing Press from this grant. This approach keeps both transactions visible: the Printing Press shows Rs. 12 lakh income, and the Ministry of Health shows Rs. 12 lakh expenditure as a grant — the subsidy is transparent and accountable.
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.