Indian Railway Establishment Manual, Volume II, PDF

INDIAN RAILWAY ESTABLISHMENT Manual (Vol - II) || Index || Chapter 17 || Chapter 18 || Chapter 19 || Chapter 20 || Chapter 21 || || Chapter 22 || Chapter 23 || Chapter 24 || Chapter 25 || Chapter 26 ||...

INDIAN RAILWAY ESTABLISHMENT Manual (Vol - II) || Index || Chapter 17 || Chapter 18 || Chapter 19 || Chapter 20 || Chapter 21 || || Chapter 22 || Chapter 23 || Chapter 24 || Chapter 25 || Chapter 26 || CHAPTER XXIII Co-operative Societies             2301. Types of Co-operative Societies. The following types of co-operative societies are functioning on the Railways:- (1) Consumer co-operative Societies (2) Co- operative credit Societies and Banks. (3) Co-operative Housing Societies.             2302. Encouragement to co-operatives.- Government policy is directed towards encouraging co-operative movement on Indian Railways. CONSUMER CO- OPERATIVE SOCIETIES (OR CO-OPERATIVE STORES)             2303. Organisation:- consumer co-operative societies referred to in this Chapter mean retail societies which provide for the needs of their members.             The work relating to organisation, supervision routine inspection, etc., of consumer co-operative societies and giving guidance to them and developing their activities is the responsibility of the Railway Administrations. This work will be under the overall control of the Chief Personnel Officers at the headquarters and they will ensure necessary co-ordination in the divisions through the Divisional Personnel officers who in turn should keep a close watch on the work of the welfare inspectors one of whose essential duties will be to look after the co- operative societies. The welfare Inspectors should be given training in the principles and practice of 'Co-operation' by the co-operative inspectors attached to the railways according to the syllabus approved by the Railway Board. The welfare inspectors should associate themselves with the co-operative inspector during the latter s visit to the societies and learn as much as possible from him of the technique of organisation, supervision, etc., of consumer societies and acquaint themselves with the type of work that is required to be done by them. One welfare inspector should be placed in charge of each centre for attending to all the items of work relating to that particular society. The welfare inspectors should submit to the chief Personnel Officers through the Divisional Personnel Officer monthly report showing the work actually done by them in connection with the organisation development etc., of the co-operative Societies.             Railway Administrations should submit to the Railway Board a quarterly report in from No. 79 of appendix 9 about the progress made in developing co-operative activity by the welfare. Inspectors. These reports should be for the quarters ending 31st March, 30th June, 30th September and 31st December of each year and should be submitted within a month from the close of the quarter.             2304. There should normally be only one co- operative store functioning at a junction station between two or more railways to be established under the auspices of the railway working the station who should bear all debits on-account of grant of subsidy. To open branches of the main store, accommodation may be provided by the other railways, for whose staff, branches are proposed to be opened. In case a non-railway building is rented for the main store or a branch, the cost of rent will be borne by the working railway under whose auspices the main store is established.             2305. Classification:- The consumer co-operative societies should be classified as follows:- (1) Small co-operative stores- with a membership below one thousand; (2) Big co-operative stores- with a membership of one thousand and above. The area of operation of each store will be fixed on the following principles:- (a) Competition between different stores should be avoided, i.e. the jurisdiction of one society should not overlap with that of the other; (b) A small store will generally have an area of operation covering a radius of about 32 Kms and minimum of six hundred railway servants residing therein; (c) the area of operation of the stores must lie within the territorial boundary of the State in which the head office is situated.             2306. Membership- (1) membership shall be open to all serving railway servants. A Railway servant desiring to become a member shall be required to purchase at least one share. The value of each share shall not be less than Rs. 10. They should also pay an admission fee of 50 Paise or Re. 1,as may be provided in the bye-laws of ,the -society.             (2) Retired or ex-Railway servants should not be permitted to become members or to continue as such beyond a limited period.             (3) Relatives and nominees of retired railway servants should not be allowed to derive any benefit of membership and their share money should not be accepted but refunded, if necessary.             2307. Management - Railway co-operative societies shall be managed as under:  (1) The Management of the societies will be carried on through a management committee which will be formed from amongst the shareholders of the society; (2) The society will appoint a paid secretary who should supervise subject to the control of the managing committee, the day to day working of the staff and organise the business of the society; (3) The managing committee may appoint sub-committees for supervising different activities of the society; (4) Subcommittees so appointed may be delegated final powers in certain matters but policy decisions taken by them must be confirmed by managing committees; and (5) The supreme authority must vest in the general body of shareholders;             2308. Taking part in the activities of Consumer Co-operative Societies by gazetted railway servants. Gazetted Railway servants can become members of consumer societies and also be elected as office-bearers but they should not become ex-officio office-bearers unless the Railway Board so approve.             Note- In respect of Railway men s consumer Co-operative societies made eligible for financial assistance referred to in items (i) and (ii) of para 2309 below, the above provisions will not apply and in that case the General manager (or officer to whom the General manager delegates his powers in this respect) would nominate on the managing committee of the Railway men s Consumer Co-operative society Concerned, gazetted officers as official representatives upto one third of the strength of the Managing Committee or three Directors, whichever is less.             2309. Concessions:- The following concessions are granted to these societies:- (i) Grant of Matching share capital contribution upto Rs. 2,500 (Per society) in the case of those Railway men's consumer co-operative Societies which have started functioning on and after 1.9.1963 as also in the case of such of doremant societies which ceased to function for want of finances and in the opinion of the Railway Administration, could be revived by the grant of this concession. The power to sanction this rests with the General Managers which may be re delegated by them to Chief Personnel Officers but not to any authority lower than him. (NO. 63/E (Coop)/40/26 Pt.dt.5.6.69) (ii) Grant of interest-bearing repayable working capital loan upto Rs. Rs. 10,000 per society to such of the Railway men s Consumer Co-operative Societies which, for want of finances, are either not functioning progressively or cannot expand their scope of activity and take up additional activities like the opening of fair price shops. The actual amount of capital loan, however, should be determined with specific reference to the actual need of the society. Co-operative Societies having more than one fair price shop may, however be granted working capital loan @ Rs. 10.000 per fair price shop instead of Rs. 10,000 for the society as a whole. The power to sanction this loan is delegated to the General Manager subject to: (I) provision of funds by Railway administration for the allotment of which the Board should be approached in advance; (ii) fulfillment of conditions by the Railway consumer co-op. Stores as laid down in para 2308 above and (iii ) the powers delegated may be re-delegated to Chief Personnel Officers but not to any authority lower than him. As to the authorities empowered to execute agreement form on behalf of the president of India for grant of interest bearing loan, para 16 of Part XVIII of the revised notification relating to the execution of contracts etc. issued by the Ministry of Law on 1.2.66 circulated to the Railways etc. vide Board s letter No. E(X)II-62/CNT-1 dt. 25.2.65 may be referred to. (NO. 63/E(Coop)/40/26 dt.. 1.2.65, 64/E/(Coop)/14/7 Pt. dt. 28.3.66, 63/E(Coop)/ 40/26/Pt. dt.5.6.69 and 74/E(Coop) 14/9/ dt. 6.8.74) (iii) Subsidy amounting to not more than half the administrative and establishment charges for the first three years, irrespective of whether the financial results of working of the society reveal a net profit or not, subject to the condition that the state co-operative Department concerned certifies that the society is functioning properly; (iv) Subsidy amounting to not more than half the administrative and establishment charges incurred in respect of fair price shop section in the case of the Railway men's Consumer co-operative- Societies which were in existence for more than 3 years from the date they started fair price shops section subject to the proviso that the concession will not be for more than 3 years from the date of starting fair price shop. (v) (a) Provision of suitable accommodation on payment of nominal rent of Re. 1 p.a. (plus actual municipal taxes) should be charged from such of the Railway men's consumer co-operative societies, which run fair price shops. (b) Rent to be charged from such of the Rail men s consumer Co-operative Societies, which do not run fair price shops should be only the out of pocket expenses in the way of maintenance charges and municipal taxes but should not include any element of depreciation and of interest. In this case rent calculated at the above rates should be recovered in terms of para1960-E.No. 63/E(Coop)/40/25 dt.30-3.64) (vi) provision of one ceiling fan for the society free of cost; (vii) Supply of water and electricity at concessional rates; (viii) Recovery of dues on account of credit sales from the salary bills of railway servants; (ix) Recovery of share money in lumpsum or by installments from salary bills of Railway servants; (x) Special passes and special casual leave to the members of the managing committee for attending meetings of the committee or board of directors or a sub-committee; (xi) Privilege passes and privilege ticket orders to the employees of the societies; (xii) Medical facilities to the staff of the societies.             All reasonable assistance should be afforded in the matter of giving quarters to the staff of the Railwaymen's Consumer Co- operative stores (including the fair price shops run by them) wherever it is considered absolutely essential and where the towns and villages are situated far away.from. the railway colonies, reasonable rent i.e., as for outsiders being recovered when ever feasible to spare quarter.             Note- The concessions of additional subsidy and nominal rent of Re. 1/- P.M. to the Railwaymen s Consumer Co-operative Societies, are intended to be allowed to such of the societies which continue to trade in the items of commodities normally covered by the fair price shop scheme for supply to their members and other railway employees even during the period when the fair price shop sections are temporarily closed down during a year according to the policy of the State Governments. Such broken periods should be reckoned for the purpose of granting additional subsidy for the maximum period of 3 years and that the broken periods wherein the consumer Co-operative Societies do not effect sales of the items normally covered by the fair price shops scheme should be excluded for this purpose.             2310. Subsidy- For the purpose of calculating the amount of subsidy to the consumer co-operative societies the following items shall be included-: Establishment Charges: (a) Pay and allowances of the staff, including monthly allowances to the secretary and other office bearers, as also society s contribution to a duly constituted employees provident Fund, if any, subject to the following exceptions:- (i) cost of staff appointed for maintaining the accounts of credit given to members by way of credit sales; and (ii) honoraria which shall be paid out of the net profits after the end of the year; (b) travelling allowance to staff and office-bearers; (c) contingent expenses claimed by the staff and office-bearers by way of conveyance charges. If any; (d) sitting fee, if any, paid to members of the managing committee or those of the Board for attending meeting of the managing committee or board of directors; Administrative Charges (e) Rates and taxes excluding charges on account of water and electricity;This does not include sales tax, transport charges, insurance premia, purchase of stationery and books, printing of forms, postal expenses and audit fees etc. and municipal tax payable on the building owned by such a co-operative society shall also be excluded. Note- (1) All consumer co-operative societies registered after 12th August 1949 despite the fact that they were working as unregistered organisations prior to that date, should be considered eligible for the subsidy provided they fulfill other conditions. (2) No subsidy will be paid societies towards the rent that will be borne by borne by them with effect from 1st October 1958. (3) Any subsidy, grant in aid etc. which for all intents and purposes is an income of Railway men s consumer co-operative society should be taken into account for accounting purposes and shown in the annual profit and loss accounts separately for their relevant period. (No. E(Coop)/55 Taxes/1 dt. 16.3.1956 & 65/E (Coop)/34/1 dt. 19.9.1967)             2311. Procedure for payment of subsidy- (i) The following procedure is prescribed for expediting the payment of subsidy shortly after the close of each quarter of the year, i.e. ending 30th September, 31st December, 31st March and 30th June the consumer co-operative societies should, in the first instance, make an application in Form No. 80 of appendix 9, to the General Manager, through the respective Registrar of co-operative societies, giving therein the different items as laid down in paragraph 2310. The registrar of Co-operative Societies, while forwarding the application of the society to the General Manager of the railway will attach a certificate in form No. 81 (Section A) of appendix 9 as to whether the society has been working properly or not. If the claim is supported by the Registrar of Co-operative Societies which shall include a certificate signed by an Assistant Registrar, Deputy Registrar or Joint Registrar on behalf of the Registrar, the papers should be passed on to the Co- operative inspector attached to the railway who will visit the society shortly there after, scrutinise each item carefully with the vouchers and see whether these are in order in the event of an item, the claim for which is not covered by the "Railway Board's instructions referred to above, it should, for the time being, be excluded though the matter can be settled later by making a reference to the Railway Board. The papers along with the inspector s certificate in Form No. 81 (Section B) of Appendix 9 should he passed on to the financial Adviser and Chief Account Officer for payment without further scrutiny. In case the Registrar does not give a certificate of satisfactory working, the society s claim should be rejected and the society informed accordingly.             (ii) However, for payment of subsidy in terms of para 2309 (iv), production or a certificate of the Registrar of Co-operative Societies is not necessary. Instead, Co-operative /Welfare Inspector, in addition to giving a certificate in Form No. 81 (Section B) should also give a certificate will be countersigned by the officer under whose signature the subsidy, bill is drawn. In the certificate to be recorded in Form No. 81 (Section B) the following may be added at the end.            To the best of my knowledge and belief, there is no reasonable suspicion of corrupt practices in the working of the above Railway men s Consumer Co-operative society.             (No. 64/E (Coop)/9/6 dt. 1-5-67)             2312. Allocation of subsidy-: The expenditure incurred in connection with the grant of subsidy should be booked under the sub- detailed head J.421-subsidy to Co-operative stores.           2313. Accommodation:- Where convenient suitable existing premises may be offered to the consumer Co-operative societies on rent. If these are not available accommodation may be taken ensuring that the rent is reasonable and the accommodation is not excessive. If neither of the courses is feasible, new building may be constructed with Railway Board s sanction. The buildings should be so designed as to admit of their conversion into staff quarters later, if necessary. In the newly established railway colonies, it should be possible to provide accommodation to consumer co-operative societies, where provision for construction of a market exists; where however, a market is not provided the construction of building for allotment to the society on a reasonable rent should be dealt with separately for each case on merits and with the prior approval of the Railway Board.              2314. Recovery of rent:- Railway men s Consumer Co-op. Societies as well as any agency authorised by state Govts. to run fair price shop will be charged nominal rent of Re. 1/- per annum (Plus actual municipal taxes) which also includes the rent of electrical installations provided in the building so licensed. In the case of Railway men s consumer Co-op. Societties which do not run fair price shops, the rent to be charged should only cover maintenance charges @ 2.5% per annum on the capital cost w.e.f. 23-5.66.Municipal and other taxes payable under local laws are to be recovered in addition in case of Railway buildings, constructed after 26.5.50. the service charges paid to the local bodies in lieu of municipal taxes should be recovered from the societies allotted with such accommodation. The rent will be recovered from the existing as well as from the new societies whether they are housed in railway buildings which are already available in buildings which are specifically for the purpose as under: Rent Payable             During the first year from 1st Oct. 1958 or the date of inauguration of the Society whichever is later. Nill. Do. Second year one-fourth Do. Third year Half rent Do. Fourth year Three-fourths rent Do. Fifth year: onwards Full rent.            2315. Minor alterations to buildings:- Minor structural alterations may be carried out by the railways to buildings allotted to consumer societies so as to make them suitable for locating their shops.             2316. Lease of Railway land:- Land, it surplus to railway, requirements may be licensed on nominal rent to the consumer co- operative societies for the purpose of construction of their own buildings subject to the condition laid down in paragraph 819, of the Indian Railway Code for the Engineering Department. The licence should include provision for resuming the land at short notice not exceeding a month. The buildings that may be put-up by the societies on railway land should be according to specification approved by the Railway Administration concerned so that such buildings may be utilised for staff quarters later.              2317. Supply of equipment:- No. equipment should be supplied to co-operative stores free of cost.                 2318. Provision of Electric fans and charges for electricity and water:- The co-operative stores should not be charged for electrical installations and fittings as the rent for the accommodation covers the cost of electrification also. The expenditure for electrification should be met from the funds provided for staff amenities. Celling fans may be provided free of cost at not more than one in number per store, additions being paid for by the society concerned. The rate for consumption of electricity should be fixed on the same basis as far railway institutes.             2319. Rules of procedure for credit sales-: (1) The consumer co-operative societies should encourage cash sales. If, however, credit sales are to be introduced, there should be provision in the bye-laws on the lines mentioned below: (i) The sales should generally be in cash; where however, credit sales are to be introduced the society may, subject to the restrictions that may be prescribed in this behalf, allow at any one time the purchase of consumer goods on credit only up to the maximum value of the share subscribed by a railway servant even if not fully paid up plus the actual amount of the purchase deposits, if any at his credit provided that he executes an agreement or an authority in favour of the Railway Administration to deduct from his monthly pay the amount due from him on account of the sales on credit. (ii) The society shall pay to the Railway Administration from time to time the fee levied by the later for the recovery of its dues from the salary bills of the member; (iii) Every society shall obtain the approval of the Ministry of labour under Section 7(2)(i)) of the payment of wages Act, 1936, before introducing credit sales, in respect of the staff governed by that Act. The amount of credit sales should not exceed the limit prescribed by that ministry under the Payment of Wages Act. Note:- No. Amendments to the bye laws which would infringe the provisions of the Payment of Wages Act, 1936 shall be made without the prior approval of the Central Government. (2) The various restrictions that may be imposed on the society in respect of credit sales by Railway Administrations are:- (i) The credit sales to the extent of full value of shares subscribed, plus the amount of purchase deposits may be allowed, in the case of those societies which are in a sound financial position and have surplus funds at their disposal and are not indebted to their members or non-members in the shape of loans or deposits etc. (ii) The limit of restricted credits to the extent of 50% of the value of the share or shares subscribed by a member  plus the amount of purchase deposits, if any at his credit, should be applied in all other cases. (3) After the necessary approval has been obtained, the society shall obtain in duplicate, an agreement in From No. 82 from its, members and furnish one copy of it to the Railway Administration. (4) Refreshments viz. tea, coffee, cooked meals, etc., served from canteens or any tea stall, etc., managed by the society, should be paid for in cash by the railway servants and no credit sales should be permitted in such cases. (5) Societies which are selling goods on credit and have not fallen in line with the above instructions will not be afforded the facility of recovery of their dues through salary bills. (6) No recovery of dues will be made if credit sales have been based on purchase deposits, since the dues in question can be set off by the co-operative societies against the deposits at the credit of any particular member. (7) The following \ procedure will be observed in connection with recovery of credit sale dues:- (i) Every society should prepare in triplicate a list as in Form No. 83 of its member making credit purchases, and forward it in duplicate to the respective Pay Bill section of the Railway administration not later than the 20th of each month which would, in turn, make the deduction from the salary bills in hand and pass one copy to the Accounts office for taking further action. The Accounts office will pass the bill and arrange to send a cheque for the consolidated amount to the society together with that copy of the list. The society should, on receipt of the cheque arrange to pass credit entries in respect of the recoveries. (ii) The Railway Administration will try to expedite the despatch of the recovered amount which should as far as possible be done within 30 days of receipt of the society s demand.             2320. Recovery of share money through salary bills. Deduction on account of share money in one lump or in instalments through salary bills can be permitted only in the case of those organisations which have been registered under the co-operative Societies Act of the respective States and if the deductions have been otherwise authorised under the payment of wages Act, 1936. The following procedure will be observed in this connection: (i) the consent of the railway servant who desires to pay the value of share/shares purchased by him through his salary bill be obtained by the society in Form No: 84 of Appendix 9 in duplicate. One copy of the form will be furnished to the Railway Administration (bill preparing section) along with the first recovery list and the other copy will be kept by the society: (ii) The society should prepare in triplicate a list of recoveries in Form No.85 of Appendix 9 and forward it in duplicate to the respective bill preparing section of the Railway Administration which will make the deductions from the salary bills of the Railway servants concerned and pass on one copy and the recovery list along with the bills (after filling in Column 6) to the Accounts Office. The Accounts Office will pass the bill and arrange to send a cheque for the consolidated amount to the society together with that copy of the recovery list. The society on receipt of the cheque and the recovery list will arrange to check the correctness of the recoveries and make necessary entries in the register maintained for this purpose. Top  INDIAN RAILWAY ESTABLISHMENT Manual (Vol - II) || Index || Chapter 17 || Chapter 18 || Chapter 19 || Chapter 20 || Chapter 21 || || Chapter 22 || Chapter 23 || Chapter 24 || Chapter 25 || Chapter 26 || CHAPTER XXIII Co-operative Societies               2321. Passes, Privilege Ticket Orders and Special Casual leave-: (i ) Special casual leave and special passes over the home and foreign lines are admissible to such railway servants as are members of managing committees of the consumer cooperative societies for attending the meetings of the managing committees including those of board of directors and sub-committees of the co-operative societies but not for attending meeting of the shareholders whether general, annual, ordinary or extra-ordinary. Special passes should not, however, be granted to the railway servants connected with the management of' consumer co-operative societies organised at different centres an the railways, for going out to make purchases from the wholesale markets.             Railway employees who are managing committee member and office bearers of the Railway men's Credit /Consumer/Housing Co- operative Societies and are posted outside the Headquarters of the societies when attending the Managing Committees, including those of Board of Directors and sub-committees of the Co-operative Societies may be allowed Special Casual leave upto a maximum of 15 days in a calendar year plus the minimum period required for the journeys to attend such meetings.             This is applicable to Railway servants who being members of the managing Committees of the Co-operative societies, have to remain absent from their duties on occasions enumerated below : (a) to attend court in connection with co-operative matter; (b) to contact and settle matters with Registrar or other State officials at the instance of the Railway Administration; (c) to attend any special meeting which may be convened by the Railway Administration; and ; (d) to contact civil authorities for lifting of the weekly quota of fair price shops etc. (ii) Privilege passes and privilege ticket orders that may be issued to the staff of the consumer co-operative stores are detailed in Railway servants (Pass) Rules, 1986. (iii) Not more than one duty card pass may be granted to each retail society for its salesmen or managers where mobile van service is operated or up to places where sales depots or branches are located.             Note-: In the case of Co-operative Credit Societies/Banks, special casual leave may be allowed as per actual requirements upto a maximum of 30 days in a calendar year. This increased limit would be applicable for attending meetings of the Managing committees and the Board of Directors but not for meeting of the sub-committees.             (No. E (G)70 LEI/2 dt. 3-9-71)             2322. Medical facilities Free medical facilities as out-patients and in-door treatment as available in railway hospitals and dispensaries may be given to the staff of the consumer co-operative societies but at per capita basis in the case of members of their families, the per capita charge, being calculated on the basis of total expenditure on medical services incurred on railway servant and their families during the previous financial year.             2323. Bye law:- The co-operative societies shall adopt the model bye-laws framed by the Railway Board in consultation with the Registrars of Co-operative Societies concerned, copies of which shall be obtainable from the Railway Administration or Co-operative Departments of the States. Guiding Principles             2324. (i) The societies should not incur expenditure which is not in the interest of promotion of their stated objects and for the purpose set forth in the bye-laws particularly in view of the large number of concessions made to enable them to stand on their feet. The societies should, therefore, avoid all wasteful and unauthorized expenditure, e.g. making contributions to labour organisations or political bodies, giving farewell parties to outsider s etc.             (ii) With a view to strengthening their financial position, the consumer co-operative societies on railways should invest at least one- third of the reserve fund outside their business in Government securities or other approved forms of investment permitted by the rules farmed under the Co-operative Societies Act.             (iii) In organising and running the societies, the following points need to be borne in mind: (a) They should not proliferate into number of.branches organised as one-stop shopping facilities for the whole range of consumer needs." (b) A judicious selection should be made of items to be sold with emphasis on high-margin goods. (c) Close and constant watch should be kept on overheads which if unchecked, could erode into available margins, which are already low.  (d) Maximum and minimum levels of stock should be prescribed in order to prevent over or under buying. (e) There should be a properly organised system of purchases based on reliable commercial intelligence and adequate expertise, a check on incoming material as regards quantity and quality and prompt, and effective system of stores accounting to keep a watch on inventories. (f) There should be a system of concurrent accounting and effective internal audit for detection as well as deterrence of mistakes and frauds. (g) A well defined budget should be prepared for setting up standards of performance. (h) There should be an experienced and alert management with a clear chart of responsibilities; who would be capable of inspiring confidence and enthusiasm and ensuring effective supervision at the floor and departmental level. This requited that management should be entrusted to men of integrity and proven experience in the line. (No. 70/E(Coop)/.9/ 15-dt. 1-7-1970)             2325. The societies should not be allowed to bid at auction sales of lost and unclaimed property on railways nor should they be permitted to work as supply contractors for railways requirements. There is however, no objection to such co-operative societies as have acquired a certain amount of stability and are in a position to offer service in an efficient manner, being permitted to supply provisions, groceries, cereals, pulses etc., to the railway catering establishment and canteens and they should be considered along with other purely on the basis of competitive prices and quality of material.             2326. The system of selling goods through an outside agency should be discouraged as also the practice of employment of private agents on payments of commission to conduct the business of consumer societies. If any society functions in contravention of the above policy its recognition should be withdrawn and all facilities to it stopped.              2327. The consumer co-operative societies shall purchase and sell as far as possible, store of established quality e.g. Agmark edible oil and ghee etc.                2328. Registration under sales Tax Act.- The societies should get themselves registered under the respective Sales Tax Acts and the tax should be recovered from the purchasers or included in the selling price and paid to the respective state Government in accordance with the law and practice of the state concerned.             2329. Divident. A consumer society may not declare a dividend when it has sustained a loss in its working for a particular year.             2330. Rebate. The net profit earned by the society in any year shall be disposed of in accordance with the bye laws of the society. The society shall maintain a proper, and correct account of purchases made by every member and at the end of the year, consolidate the total amount of purchases in each cases. This account shall be utilised for calculating the share of rebate earned by the member on the purchases he makes. Rebate shall be paid after the audited financial statements are passed by general meeting and only if there is a surplus left after making allocations to reserve fund, dividend etc., in accordance with the bye laws. If the dividend or rebate is not claimed for 3 years from the date it becomes due, it shall be forfeited to the reserve fund of the society. Rebate shall be paid at higher rate on cash purchases than on purchases made on credit.             2331. Restrictions regarding collection of minimum share capital:- No. restriction other than what may have been fixed statutorily or through executive instructions by the state Governments need be imposed by the railways on the consumer 'co-operative societies regarding the collection of minimum shares capital before the societies are recognised by the Railway Administration.               2332. Audit- (i) The audit of consumer co-operative societies should be done by the State Co-operative Departments. Normally, the audit should be completed within six months of the close of the co-operative year ending 30th June. The Railway Administrations should keep a watch on the progress in auditing the societies and where necessary approach the registrars of Co-operative Societies concerned for arranging timely audit. Any case of undue delay in completing the audit of societies should be brought to the notice of the Railway Board.             (ii) In order to assist the auditors in the timely completion of audit, the railways should impress on the societies the need to keep their accounts up-to-date and to close them soon after the close of the co-operative year. They should also ensure through the agency of the welfare Organisation, including the Personnel Officers that the societies have done so and have kept their accounts ready for check by the auditors.             (iii) Soon after the receipt of the audit report in each case, the Railway Administration should obtain two copies of the audited balance sheets and other final accounts (viz, statements of receipts and disbursements, trading and profit and loss accounts) from the societies concerned so as to facilitate a comparative study of the progress made by the societies during each year. One copy of these statements should also be submitted to the Railway Board for their information.             (iv) The welfare Inspectors should check up during their visits to the societies whether the audit has been completed and audit reports received by the societies. If so, they should anrrange for submission of the copies of the reports to the Railway Administrations on the spot. If not, they should meet the Assistant Registrar/ Auditor, and arrange for the timely completion of audit.             2333. Progress Reports The co-operative inspectors as well as the consumer co-operative societies should furnish their reports in regard to the organisation.and registration of new societies and supervision of the copies of the existing societies as the case may be to the Railway Administration concerned, who should prepare monthly reports in form No.86 of Appendix 9 on the basis of the above information and furnish the same to the Railway Board together with their own remarks about the general progress made by the consumer co-operative societies by the 10th of the month following that to which the report pertained.             2334. Scale for paid establishment :- Standards to be followed ordinarily as regards the optimum size of the cooperative stores and the managerial personnel to be employed in each case are given below:- (i) A small store having a membership of at least three hundred but not exceeding one thousand, can be managed by a secretary-cum-manager with a committee of management for exercising supervesion and deciding policy matters; (ii) The bigger stores having a membership of over one thousand may require the services of a secretary and a manager to assist the governing body in managing the stores. The need for this will depend on the volume of business, the location of the clientele etc. If branches have to be opened at stations other than the headquarters, of the stores, staff for such branches will naturally have to be found separately. The emphasis should, however, be on economy in expenditure.             2335. Training of staff. (i) Staff employed as managers and accountants should be got properly trained in the Co-operative Training Institute run by the Co-operative Department of the State in which the society is located. The cost of the training should either be borne by the employee himself or by society concerned and the railways will not incur any expenditure on that account except in the matter of giving free passes to the employees. For this purpose, one set of passes of appropriate class should be issued either to the manager or the accountant of each society per year from the place of working up to the training centre and return.             (ii) With a view to disseminating knowledge to the members of the Managing Committee of the Railwaymen s consumer Co- operative societies and free flow of ideas of what is happening in one part of the country to such co-operative in other parts, Railway Administration should conduct Co-operative Work-shops at the divisional or headquarters level under advice to the Railway Board. Where it is decided to conduct a seminar on a state-wise basis, members of the managing Committee of a Co-operative society located in the contiguous area but on a different railway may be invited by mutual consent of the concerned Railways.             Attendance in such workshop/meetings/seminars etc. organised by Railway Administrations is obligatory on the part of the railway employees and their absence from duty for the purpose would be treated on tour             (No. 67/E (Coop)/23/l. pt. dt. 27-10-67:/E(Coop)/23/l. pt. dt 31.8.68: 67/E/(Coop)/23/1. pt. dt. 16.9.68.)             2336. Quarters for staff. Wherever quarters are provided to the employees of the consumer co-operative societies rent shall be recovered in accordance with the provisions of paragraphs 1961 of the Indian Railway Code of the Engineering Department. (Revised Edition 1982).                2337. Deputation of Railway servants. prior approval of the competent authority has to be taken whenever any railway servant is sent on deputation to work as paid secretary, manager, accountant etc., of a Co-operative store. The railway servant placed on deputation with a co-operative store will be on the usual "Foreign Service terms and the requisite contributions towards leave, pension, provident fund, bonus, gratuity etc., will be paid by the co-operative societies concerned to the Railway Administration. Note- The above provisions are also applicable in the case of railway servants to railway employees Co-operative credit, societies/Banks and paid secretaries or managers.             2338. Protective measures against defalcation and thefts:- (1) Defalcation- The following measures shall inter alia be taken to check defalcation of money in Co-operative stores:- (i) Adequate security from the societies' staff handling cash and property should be obtained; (ii) Proper accounts should be maintained from day to day and examined in the monthly meetings of the managing committee of the societies; (iii) Once a week or fortnight, proper accounts should be obtained by the managing committees from the directors or office bearers who have taken advances for making purchases of stocks.               (2) Thefts. Co-operative societies should make adequate arrangements for watch and ward by appointing a night watchman whose work should be supervised and checked by the office bearers periodically. Where the doors and windows of buildings provided by the Railway Administration require repairs or replacement, the matter should be brought to the notice of the administration without delay. Co-operative Credit Societies /Banks             2339. The main object of Co-operative Credit societies is to encourage habit of thrift among members rather than provided loans to them at reasonable rate of interest. The rates of subscription recoverable from subscribers every month, rate of interest on the subscription, withdrawal of sum from compulsory thrift deposit, re-admission of a member of a Co-operative Credit Society, penal rate of interest in case of compulsory monthly subscription falling in arrears, deduction of amount due to a Society from the subscription at the time of making an advance from the compulsory deposit etc; should be as per bye- laws of respective registered Co-operative Credit societies /Banks             2340. The following facilities are extended, to co-operative credit societies and banks- (i) recovery of loans, bank deposits, and compulsory thrift deposits through the salary bills of the staff concerned; (ii) privilege passes and privilege ticket order for the employees of the societies available over    both home and foreign lines as per scale laid down in Railway Servants (Pass) Rules 1986. (iii) special casual leave and passes for members of the managing committee to attend meetings as laid down in paragraph 2921;  (iv) provision of accommodation at reasonable rent in railway premises in accordance with the provision contained in para 1960 of the code of Engineering Department (Revised edition of 1982); (v) free publication of their notices in the weekly gazettes; (vi) medical facilities in railway hospitals and health units to the staff and to the members of their families at a per capital charge, calculated on the basis of total expenditure on medical services incurred on the railway servants and their families during the previous financial year.             2341. Co-operative credit societies/banks should pay for railway accommodation under extent orders, as well as per for telephones, electricity, water, etc.             2342. In regard to the services rendered under item (i) of paragraph 2340, the Co-operative credit societies and banks will pay for such recoveries as are made from the salaries /wages of railway servants concerned towards repayment of loans including interest thereon only and not in respect of deposits and mutual retirement benefit funds etc. For this purpose, the following standardised basis of charges has been laid down. Societies/ Banks- (i) Having working capital of Rs. 2 lakhs and above; 25 Paise per hundred rupees of loans recovered or fraction thereof. (ii) Having working capital of less than Rs. 2 lakhs 6 Paise per hundred rupees of loans recovered or fraction thereof.             Note:- Monthly bills should be prepared against the societies concerned for the work done for them. These recoveries can, however, be waived in respect of those societies which setup a welfare fund in accordance with the rules framed for the purpose.             2343. Prior sanction of the Railway Board should be taken if any credit society is to be organised on the Railways.             2344. Co-operative Housing societies:-Railway servants whose income range between Rs. 701 and 1500 p.m. or Co-operative Housing Societies consisting of such Railway servants are eligible for loan under the low Income Group Housing Scheme for construction of houses. These loans will be available to them through the Head of Department. Not more than one loan or advance can be obtained by Railway servants from any Govt. source. In order that Railway servants might take advantage under either of these schemes, it would be desirable for Co-operative Housing Societies to acquire suitable land and allot it to members after development. In this connection, the Societies might also take the help of state Governments which have been advised by the Central Government to try to arrange, where possible, to acquire suitable sites and sell them after development to intending builders. F. NO. 86/CR/IREM/Ch. XXIX MISCELLANEOUS             2345. Levy of income tax on profit:- (i) No tax is payable on the profits and gains of business carried by Railway men's Co- operative Credit societies /Banks as they are engaged in providing credit: facilities to their members.             (ii) (a) Consumer Co-operative Societies will have to pay income tax in respect of their profits and gains of business which is in excess of Rs. 40,000 in any years.             (b) Where a Consumer Co-operative Society makes bulk purchases of commodities which it sells to its members the rebate passed on to the members on the value of purchases made by them during a year will be treated as deferred discounts and allowed as a deduction in computing the taxable income.             (Authority Board's letter No. 87/E(Co-op)25/2 dt. 5.1.89) Top