Categorise the following as Revenue and Capital receipts (give reasons):
(a) School fees in government school
(b) Challans
(c) Disinvestment
(d) Custom duty

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Solution

(a) Revenue receipt because school fees in government school neither increases the liability nor reduces the assets of the government.
(b) Revenue receipt because challans are collected just out of disobeying the law from the people which neither increase the liability nor reduce the assets of the government.
(c) Capital receipts because disinvestment means selling of PSUs. It reduces the assets of the government.
(d) Revenue receipt because it is a compulsory payment to the government for export and import. It neither increases the liability nor reduces the assets of the government.

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(i) Receipt from sale of shares of a public sector undertaking.

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