The Consumer Welfare Fund (CWF) is an initiative established under Section 57 of the Central Goods and Services Tax (CGST) Act, 2017, aimed at promoting and protecting the interests of consumers in India. Here’s a breakdown of its key aspects:

Purpose under the GST Act, 2017:

• To provide financial assistance for initiatives that benefit consumers of goods and services.
• To raise awareness about the provisions of GST and empower consumers to understand their rights and responsibilities under the tax system.
• To strengthen the consumer movement in the country.

Funding under the GST Act, 2017:

• The fund receives contributions from several sources, including:
  • A portion of the unclaimed or abandoned refunds under the GST Act.
  • 50% of the amount collected as cess on certain goods and services.
  • Voluntary contributions from individuals or organizations.

Utilization under the GST Act, 2017:

• The fund is utilized for various activities as per Rule 97 of the CGST Rules, 2017, including:
  • Consumer awareness campaigns and educational programs about GST.
  • Supporting consumer organizations and research related to consumer protection.
  • Reimbursing legal expenses incurred by consumers in certain cases.
  • Funding initiatives for redressal of consumer grievances.
  • Up to 50% of the fund can be used for publicity and awareness regarding GST, provided a minimum amount is allocated for other consumer welfare activities.

Management under the GST Act, 2017:

• The fund is managed by a committee chaired by the Secretary, Department of Consumer Affairs.
• The committee has representatives from various ministries and consumer organizations.

Overall Significance under the GST Act, 2017:

• The CWF plays a crucial role in empowering consumers and ensuring they benefit from the GST regime.
• By raising awareness and providing support, the fund contributes to a fairer and more transparent marketplace for all.

EXAMPLE

The Consumer Welfare Fund (CWF) was established under Section 57 of the Central Goods and Services Tax (CGST) Act, 2017. The fund is used to promote and protect the welfare of consumers in India. The fund is managed by a Standing Committee headed by the Secretary, Department of Consumer Affairs.

Here are some examples of how the CWF has been used in different states in India:

• Karnataka :The CWF has been used to set up a Consumer Helpline in Karnataka. The helpline provides consumers with information and advice on their rights and responsibilities under the GST law.
• Tamil Nadu: The CWF has been used to fund a consumer awareness campaign in Tamil Nadu. The campaign aimed to educate consumers about their rights under the GST law and how to file complaints.
• Madhya Pradesh: The CWF has been used to set up a Consumer Forum in Madhya Pradesh. The forum provides consumers with a platform to resolve their disputes with businesses.

FAQ QUESTIONS

1. What is the Consumer Welfare Fund (CWF) ?

The CWF is a fund established under the GST Act, 2017 (Section 57) to promote and protect consumer welfare. It receives unclaimed amounts like refunds not claimed by taxpayers within the specified time.

2. How is the CWF utilized?

The CWF is used for various consumer welfare activities as per Rule 97 of the CGST Rules, 2017, including:

• Publicity and consumer awareness on GST: This includes campaigns, workshops, and materials to educate consumers about their rights and responsibilities under GST.
• Financial assistance to organizations: Central/State governments, institutions, and consumer organizations can receive grants for projects promoting consumer welfare, research, and advocacy.
• Creating consumer law chairs/center: Universities and reputed institutions can receive support to establish centers for research and training on consumer law issues.
• Establishing state-level corpus funds: The CWF co-contributes to create funds for consumer welfare activities at the state level.

3. Who can access the CWF?

Central/State governments, government bodies, institutions (including universities, PSUs, and autonomous bodies), and registered voluntary consumer organizations (VCOs) can apply for financial assistance from the CWF.

4. How can organizations apply for CWF grants?

Proposals are invited online through the Department of Consumer Affairs website. VCOs must register on the NGO Darpan portal before applying.

CASE LAWS

Establishment and Purpose:

• The CWF was created under Section 57 of the CGST Act, 2017.
• The purpose is to utilize funds for consumer welfare activities as per Section 58 and Rule 97 of the CGST Rules, 2017.
• This aims to empower consumers by enhancing their awareness of GST rights and responsibilities.

Fund Sources:

• 50% of the Integrated Tax (IGST) and Compensation Cess on inter-state transactions (as per section 54 & 20 of CGST and IGST Act respectively) are deposited in the CWF.

Fund Utilization:

• Rule 97 prescribes various activities eligible for CWF funding:
  • Promoting and protecting consumer welfare under GST.
  • Incentivizing consumers to exercise their rights and responsibilities.
  • Publicity and consumer awareness campaigns.
  • Reimbursement of legal expenses for eligible consumer complaints.
• 50% of the CWF is made available to the Central Board of Indirect Taxes and Customs (CBIC) for consumer awareness on GST, provided the Department of Consumer Affairs receives at least Rs. 25 crore annually.