The term 'recovery' is used in this chapter in a limited sense to denote repayment of or payment by another department of the same Government or by another Government or by a non-Government party (including public sector undertakings, autonomous bodies and private persons and bodies to a Government Department) which initially incurred the charge and classified it in the accounts as final expenditure by debit to revenue or capital heads of accounts. Recoveries towards establishment charges, tools and plants, fees for procurement or inspection of stores, or both etc. effected at percentage rates or otherwise, are some examples.
53. Recoveries of expenditure for services or supplies made to non-Government parties or other Governments (including local funds and Governments outside India) shall, in all cases be classified as receipts of the Government rendering such services or supplies.
Exceptions - (i) When a Government undertakes a service merely as an agent of a private body, so that the entire cost of the service is recovered from that body, the net cost to Government being nil, the recoveries may be taken in reduction of expenditure.
NOTE:- In the case of projects, jointly executed by several Governments, where the expenditure is to be shared by the participating Governments in agreed proportions, but the expenditure is ab initio incurred by one Government and shares of another participating Governments recovered subsequently, such recoveries from other Governments should be exhibited as abatement of charges under the relevant expenditure head of account in the books of the Government incurring the expenditure initially.
54. As between different departments of the same Government, the recoveries shall be classified as deduction from the gross expenditure except that such recoveries as are made by a commercial department e.g. Railways, Department of Posts and Department of Telecommunications or a departmental commercial undertaking (e.g. A.I.R.) should be treated as receipts of that department.
Exception:Recoveries of fees for purchase, Inspection etc., effected by the Central Purchase Organisations of Government of India (e.g. DGS&D Army Purchase Organisations of the Ministry of Defence) are treated as receipts of the Department concerned.
NOTE 1:Such recoveries realised by a non-commercial department (other than the Central Purchase Organisations of the Government of India) from another Department of the same Government shall be shown in the relevant Demand for Grant as "below the line" recovery under the appropriate major head of account. Recovery actually effected, irrespective of the year to which it relates, shall be adjusted in accounts in reduction of expenditure and exhibited in the schedule of recovery to be attached to the Appropriation Accounts of the year in which the recovery is effected.
NOTE 2:The term "recoveries" by a commercial department (viz. Posts, Telecommunications and Railways) or by a Departmental commercial undertaking (e.g. A.I.R.) for the purpose of this rule shall apply to recoveries in respect of services rendered to other departments in pursuance of the proper functions for which the department is constituted, that is to say, in the case of Department of Posts and Department of Telecommunications, recoveries shall be classified as receipts only when they are made in respect of Postal, Telegraphs or Telephone services rendered to the other departments. Where, a commercial department or a departmental commercial undertaking acts as an agent of another department for the discharge of functions not germane to the essential purpose of the department, the recoveries shall be taken in reduction of expenditure.
55. The technical estimates of a work take cognizance of all anticipated receipts from sale proceeds of materials, plant, etc. received from the old structure, while the receipts under "stock and suspense" are by their very nature inseparable from the expenditure recorded under the main head. The recoveries falling under these two categories shall notwithstanding anything to the contrary provided by or under the rules in this Chapter, be treated as reduction of gross expenditure.
56. Notwithstanding anything to the contrary provided by or under the rules in this Chapter, receipts and recoveries on capital Accounts insofar as they represent recoveries of expenditure previously debited to a Capital Major head shall be taken in reduction of expenditure under the major head concerned except where under the rules of allocation applicable to a particular department such receipts have to be taken to revenue.