Section 57 of GST – Consumer Welfare Fund with Analysis

Section 57 of GST – Consumer Welfare Fund. Check Details for GST Section 57 –If the applicant is unable to prove that the incidence was not actually passed onto any other person then the refund amount is credited to the Consumer Welfare Fund.

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Section 57 of GST – Consumer Welfare Fund

The Government shall constitute a Fund, to be called the Consumer Welfare Fund and there shall be credited to the Fund, —

  • (a) the amount referred to in sub-section (5) of section 54;
  • (b) any income from investment of the amount credited to the Fund; and
  • (c) such other monies received by it, in such manner as may be prescribed.

Analysis and Updates

Introduction

If the applicant is unable to prove that the incidence was not actually passed onto any other person then the refund amount is credited to the Consumer Welfare Fund.

The overall objective of the Consumer Welfare Fund is to provide financial assistance to promote and protect the welfare of the consumers and strengthen the consumer movement in the country.

Analysis

The following amounts will be credited to the Fund, in such manner as may be prescribed, –

  • All amounts of duty/central tax/ integrated tax /Union territory tax/cess
  • income from investment along with other monies specified in section 12C(2) of the Central Excise Act, 1944.

However, in case of integrated tax and compensation cess as determined under Section 54(5), an amount equal to fifty percent of such sum shall be deposited in the fund.

In case of any amount that has been credited to the fund that is now ordered or directed to be to be paid to a claimant by the proper officer, appellate authority or court, then, the same shall be paid from the fund.

Audit of the Accounts of the Fund

Rule 97(3) provides that the accounts of the fund shall be maintained by the Central Government and subject to audit by Comptroller and Auditor General of India.

Constitution of the Committee

Rule 97 of the CGST Rules provides that the Government shall constitute a Standing Committee with a Chairman, a Vice-Chairman, a Member Secretary and such other Members as it may deem fit and the Committee shall make recommendations for proper utilisation of the money credited to the Consumer Welfare Fund for welfare of the consumers. The Committee shall meet as and when necessary, generally four times in a year.

Meeting of the Committee

Rule 97(5) provides that the committee shall be required to comply with the following with regard to its meetings:

  • The committee shall meet as and when necessary, generally four times a year.
  • The committee shall meet at such time and place as the Chairman, or in his absence, the Vice Chairman may deem fit.
  • The meetings of the Committee shall be précised by the Chairman, or in his absence by the Vice Chairman of the Committee
  • A committee meeting shall be called after giving a minimum ten days’ notice in writing to every member.
  • The notice of the meeting of the Committee is required to specify the place, date and hour of the meeting along with a statement of business to be transacted thereat.
  • A meeting shall not be valid, unless it is presided over by the Chairman, or in his absence, the Vice Chairman and attended by a minimum of three other members.

Powers of the Committee

The Committee shall have the following powers:

  • To require any applicant to get registered with any authority as the Central Government may specify;
  • to require any applicant to produce before it, or before a duly authorised officer of the Central Government or the State Government, as the case may be, such books, accounts, documents, instruments, or commodities in custody and control of the applicant, as may be necessary for proper evaluation of the application;
  • to require any applicant to allow entry and inspection of any premises, from which activities claimed to be for the welfare of consumers are stated to be carried on, to a duly authorised officer of the Central Government or the State Government, as the case may be;
  • to get the accounts of the applicants audited, for ensuring proper utilisation of the grant;
  • to require any applicant, in case of any default, or suppression of material information on his part, to refund in lump-sum along with accrued interest, the sanctioned grant to the Committee, and to be subject to prosecution under the Act;
  • to recover any sum due from any applicant in accordance with the provisions of the Act;
  • to require any applicant, or class of applicants to submit a periodical report, indicating proper utilisation of the grant;
  • to reject an application placed before it on account of factual inconsistency, or inaccuracy in material particulars;
  • to recommend minimum financial assistance, by way of grant to an applicant, having regard to his financial status, and importance and utility of the nature of activity under pursuit, after ensuring that the financial assistance provided shall not be misutilised;
  • to identify beneficial and safe sectors, where investments out of Fund may be made, and make recommendations, accordingly;
  • to relax the conditions required for the period of engagement in consumer welfare activities of an applicant;
  • to make guidelines for the management, and administration of the Fund.

Utilisation of funds by the Committee

Rule 97 of the CGST Rules also provides that any utilisation of amount from the Consumer Welfare Fund under sub-section (1) of section 58 shall be made by debiting the Consumer Welfare Fund account and crediting the account to which the amount is transferred for utilisation.

The Rule also clearly lays down the manner in which the proceedings of the Committee are to be regulated, the powers that may be exercised and recommendations that may be made by such Committee

Comparative review

These provisions are broadly similar to the provisions contained in erstwhile Central Indirect Tax laws.

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