What are Government Receipts?

  

What are Government Receipts?

After the Reserve Bank of India, Notification on 17^th November, 2009, regarding Government Receipts in RTGS Systems, the question now is what are Government Receipts?

I will try to make this subject as simple and brief as possible.

One good source is the FAQ’s of Reserve Bank of India’s website.

The FAQ’s can be accessed at

http://www.rbi.org.in/Scripts/FAQView.aspx?Id=61

        In simple terms, Government has to receive to itself, on various accounts viz: sales tax, excise duty, professional tax, land revenue etc. from various private institutions, individuals

Hence, the Government has to maintain Bank Accounts to enable people to deposit the Dues to Government. Government too has to maintain Bank Accounts as; it cannot have a different collection channel.

The Central/State Government’s have authorized to Reserve Bank of India, to undertake the receipts and payments of the Central/State Governments and to carry out the exchange, remittance and other banking operations.

Reserve Bank of India, discharges this duty through

01) A network comprising the Public Account Departments of RBI

02)                     Branches of Agency Banks appointed under Section 45 of the RBI Act. At present all the public sector banks and private sector banks viz. ICICI Bank Ltd., HDFC Bank Ltd.and UTI Bank Ltd. act as RBI's agents. Only authorised branches of Agency banks can conduct Govt. business.

Each Credit to a government bank account should be accompanied by a supporting Challan, for proper accounting in the Government Books.

Challan is a standard form prescribed for government payments.

 This format is designed for collection of government payments viz. sales tax, excise duty, professional tax, land revenue etc. from various private institutions, individuals from time to time and is implemented by government departments as per the requirements.

The payment of challan is accepted in the authorized bank branches, only and one has to go in person and stand in long queues if required to make the payment.

Of course some Banks are now offering this facility through their Internet Banking Facility.

The Challan has to be accompanied by Demand Draft/Pay Order/Cash. Please note that RTGS/NEFT is not yet compatible with this Challans.

However, credits to Government Bank Accounts via RTGS/NEFT have started to flow, in customer mode.

The Receiving Bank was having issues to credit to Government Accounts as the RTGS Customer Transaction Message format does not capture the Challan fields.

Hence, the Beneficiary Bank’s, have no other option than RETURN back the funds.

As the number of such RTGS transactions were increasing, Reserve Bank of India, decided to step in, and issue guidelines.

This guidelines were issued vide Notification No: - RBI/2009-10/226 DPSS (CO) RTGS No.991/04.04.002/2009 – 2010 dt. November 17, 2009

  

As the guidelines prescribe bilateral arrangements between the Sending and Receiving Bank, I feel, Reserve Bank, for the present desires to discourage routing of Credits to Government Bank Accounts through RTGS. 

Of course, this is only a temporary phenomenon, and there will be public pressure, to make the necessary changes in RTGS formats to accept Government Receipts.