Rule 11 of the GST Settlement of Funds Rules, 2017

Rule 11

Rule 11. Other provisions.—

(1) The Principal Chief Controller of Accounts shall, on the receipt of above reports, calculate the net payment to be made from the Integrated Goods and Services Tax account to each State or vice versa and shall send to the Department of Revenue a State-wise summary of the same within three working days of receipt of the data from Goods and Services Tax Network and thereafter, based on receipt of this data, a provisional sanction order for the month shall be issued by the Department of Revenue as per the procedure specified in sub-rule (2).

(2) The procedure for resolution of any discrepancy in the data provided by Goods and Services Tax Network shall be as follows, namely:—

(a) on the basis of the above reports provided by Goods and Services Tax Network for every month, the Central and respective State Accounting Authorities, the Board and the State Tax nodal authorities shall reconcile the details of the payments received, Input Tax Credit cross-utilisation, reversal and declarations thereof, and apportionment details received from Goods and Services Tax Network, and shall revert to Goods and Services Tax Network and Principal Chief Controller of Accounts in case of any discrepancy by the 20th of the subsequent month;

(b) if any discrepancy is pointed out by the Central or State Accounting Authority or Taxation Authority within this period, the Goods and Services Tax Network shall look into it and prepare a Revised Calculation, if required and send it again to both the Central as well as State Accounting, Taxation Authorities and Principal Chief Controller of Accounts by 25th of the said subsequent month;

(c) based on the revised calculation received from Goods and Services Tax Network and after having reconciled the discrepancy referred to in clauses (a) and (b), in case any changes have been made with respect to any State, the Principal Chief Controller of Accounts shall calculate the net payment to be made from Integrated Goods and Services Tax account to each State or vice versa and shall send to Department of Revenue a final State-wise summary of the same within three days of receipt of the revised data from Goods and Services Tax Network and based on receipt of this data a final sanction order for the month shall be issued by the Department of Revenue as per the following procedure namely:—

(i) the Principal Chief Controller of Account shall send to Department of Revenue, Ministry of Finance the details of the State-wise fund settlement with States;

(ii) a designated officer in the Department of Revenue shall issue the sanction order of funds to be transferred from Integrated Goods and Services Tax account to each State or vice versa after obtaining necessary approvals of the competent authority;

(iii) the provisional sanction order for each month for each State shall be issued based on details issued by Principal Chief Controller of Accounts as per sub-rule (1);

(iv) the final sanction order for each month for each State, in case needed, shall be issued based on details issued by Principal Chief Controller of Accounts as per clause (b);

(v) the sanction orders shall be issued within three days of receipt of details of the State-wise fund settlement issued by Principal Chief Controller of Accounts;

(vi) the electronic Sanction (digitally signed) addressed to Central Accounting Authority containing State-wise details shall then be sent to the Office of Principal Chief Controller of Accounts, Central Board of Indirect Taxes and Customs;

(vii) the sanction letter shall also contain the details of settlement and it shall be available in records of State Government for future reconciliation and audit purposes;

(viii) the State Governments shall be informed about the fund being transferred by Centre through the sanction;

(ix) a copy of sanction shall also be endorsed to concerned State Accountant General;

(x) the Central Accounting Authority shall generate an Inter Government Advice on the basis of sanction received from Department of Revenue and send it to the Reserve Bank of India [Central Accounts Section, Nagpur] electronically within three days of issue of sanction order;

(xi) the Reserve Bank of India shall make the necessary fund settlement between the Consolidated Fund of India and the Consolidated Fund of States of the respective State, on the basis of electronic Inter Government Advice; generate the ‘Clearance Memo’ and transmit the same to Central Accounting Authority and State Accounting Authorities and Accountant General;

(xii) the Central Accounting Authority shall make appropriate accounting entries at the time of issuance of inter Government Advice to Reserve Bank of India;

(xiii) the respective State Accounting Authority and Accountant General shall make appropriate accounting entries at the time of receipt of clearance Memo from Reserve Bank of India.

(d) The procedure for resolution of any discrepancy in respect of lists generated in accordance with the Standard operating Procedure, shall be as follows, namely:—

(i) on receipt of the reports generated in accordance with the Standard Operating Procedure provided by Goods and Services Tax Network for every month, the State Tax nodal authorities shall reconcile the details of the payments received, Input Tax Credit cross utilisation, reversals and declarations thereof and apportionment details as received from Goods and Services Tax Network, and where any discrepancy is noticed in respect of the said reports, the concerned nodal authority shall communicate the same to the Goods and Services Tax Network their findings with respect to the said discrepancy, attaching thereto a detailed explanation in support of their findings, along with the necessary evidence and documents, if any, connected to the said matter, as far as possible, within a period of three months from the end of the month in which the reports are received;

(ii) the communication, findings, explanation and the evidence and documents referred to in sub-clause (i) above shall be examined in detail by Goods and Services Tax Network, as far as possible, within a period of three months from the end of the month in which the said communication is received, and where the explanation is borne out from the records and other evidence, if any, in connection with the matter under examination, any amount found eligible for settlement shall be included in the reports of the period immediately succeeding the period in which the examination was concluded:

(iii) Provided that where only a part of the amount excluded from the reports is borne out from the records and other evidence, if any, in connection with the matter under examination, only so much of the amount as is so borne out shall be included in the report of the succeeding period, as aforesaid.