Recoveries of service payments

(a) If made before the close of the year in which the payment was charged in the accounts—

(1) When the recovery is in adjustment of an overcharge on account of pay and allowances and is made by deduction from a bill (note 6 under paragraph 81 of Volume V of the Handbook), the net amount only of the bill should be charged in the cash-book and the amount recovered should not be shown as a separate item of receipt therein. The amount deducted, with the necessary particulars, should be noted in the "Remarks" column of the classified abstract of expenditure (form no. 25).

(2) In all other cases the amounts recovered should be entered on the debtor side of the cash-book as "Recoveries of service payments," but not remitted into the treasury as revenue receipts. In the classified abstract of expenditure (form no. 25) the amounts should be shown as minus entries in red ink under the sub-heads to which they were originally charged, so that the total of form no. 25 will be correspondingly reduced, as also the amount of the lump sum entry to be made in the monthly cash account (form no.3), as the expenditure charged during the month.

(b) If made after the close of the year in which the payment was charged in the accounts—

The amount recovered should be credited in the cash-book as miscellaneous revenue under "V(b)—Refunds and other sources" and paid into the treasury.

NOTE—Amounts of undisbursed pay and allowance relating to a particular account year, but refunded in a subsequent year should be adjusted as a reduction of charge in all cases except when a refund is made in cash which should be accounted for as revenue.