Section 57 of CGST Act - Consumer Welfare Fund

Text of Section 57 - Consumer Welfare Fund

Meaning and scope of Section 57

Section 57 creates the statutory Consumer Welfare Fund under the CGST Act. In simple terms, it identifies a dedicated fund into which specified GST-related amounts and related income are credited instead of being retained as ordinary receipts.

The section identifies three broad sources of credit: amounts covered by Section 54(5), income earned from investment of money already credited to the Fund, and other money received by the Fund. The expression "in such manner as may be prescribed" connects the section with the procedural rules framed under the CGST Act, particularly Rule 97 of the CGST Rules, 2017.

How Section 54(5) connects with the Consumer Welfare Fund

Section 54 of the CGST Act governs refunds. Under sub-section (5), after examining the refund application and supporting evidence, the proper officer may order the amount determined to be refundable to be credited to the Consumer Welfare Fund where the statutory refund framework requires such credit.

The practical refund procedure is also reflected in the CGST Rules. Where the refundable amount is not payable to the applicant under the applicable provisions of Section 54, the prescribed refund order and payment advice mechanism provides for credit to the Consumer Welfare Fund.

Rule 97 of CGST Rules, 2017 - Consumer Welfare Fund

Rule 97 provides the principal procedural framework for the Consumer Welfare Fund. It deals with credits to the Fund, payment from the Fund when an amount is later ordered to be paid to a claimant, audit of the Fund, constitution and functioning of the Standing Committee, and recommendations for proper utilisation of the Fund for consumer welfare.

The current Rule 97 framework also covers amounts of central tax, integrated tax, Union territory tax, cess and related income that are required to be credited to the Fund under the applicable GST enactments. Accounts of the Fund maintained by the Central Government are subject to audit by the Comptroller and Auditor General of India.

The Standing Committee constituted under Rule 97 makes recommendations for proper utilisation of money credited to the Fund. The Department of Consumer Affairs has also issued Consumer Welfare Fund Guidelines for administration of grants and consumer welfare projects.

Utilisation of the Fund under Section 58

Section 58 of the CGST Act provides that sums credited to the Consumer Welfare Fund are to be utilised by the Government for the welfare of consumers in the prescribed manner. It also requires proper and separate accounts and other relevant records in relation to the Fund and an annual statement of accounts in the prescribed form.

Accordingly, Sections 57 and 58 should be read together: Section 57 establishes what is credited to the Fund, while Section 58 addresses how the Fund is used and accounted for.

Why the Consumer Welfare Fund matters in GST refunds

The Consumer Welfare Fund forms part of the statutory refund structure under GST. A refund claim does not automatically mean that the sanctioned amount is paid directly to the applicant. The refund provisions require the proper officer to determine whether the amount is payable to the applicant under Section 54 or is required to be credited to the Consumer Welfare Fund.

This mechanism is associated with the principle that a person should not receive a refund where the incidence of tax has been passed on to another person, subject to the statutory exceptions contained in Section 54. For any particular refund claim, Section 54, the applicable CGST Rules, notifications and the facts of the transaction should therefore be examined together.

Official GST and Consumer Welfare Fund resources

For the latest statutory text, rules, notifications and administrative material, refer to the official resources below. Amendments and notifications should be checked before relying on the provision for a current proceeding or refund claim.

• CBIC - GST Acts
• CBIC - GST Refund Rules
• India Code - Central legislation
• Department of Consumer Affairs - Consumer Welfare Fund and Rule 97
• Department of Consumer Affairs - Consumer Welfare Fund Guidelines

Related provisions

Section 54 - Refund of tax | Section 55 - Refund in certain cases | Section 56 - Interest on delayed refunds | Section 58 - Utilisation of Fund