The erstwhile Central Excise and Salt Act, 1944 was amended in 1991 to enable the Central Government to create a Consumer Welfare Fund (CWF) where the money which is not refundable to the manufacturers, etc. was to be credited. The Consumer Welfare Fund Rules were notified in the Gazette of India in 1992. After CGST Act, 2017, CGST Rules, 2017 have been framed. The Act and Rules of 2017 superseded the above Act of 1944 and CWF Rules, 1992-incorporated in the Consumer Welfare Fund Rule 97 of the CGST Rules, 2017. The present Consumer Welfare Fund has been setup under section 57 of the CGST Act, 2017.

The Guidelines for administration of the Consumer Welfare Fund were framed based on the report of a Working Group set-up in 1993, which have subsequently been revised in 2007, 2014, 2019 and 2023.

The financial assistance from CWF is extended to Central/State Governments/Government Bodies, Institutions of National repute like Universities, Autonomous bodies, etc. to promote, protect and advocate the welfare and interests of the consumers in India, create consumer awareness and strengthen consumer movement in the country. Financial assistance/Grant from the CWF is mainly given for the following projects/activities:

1. Creation of Consumer Law Chairs/ Centres of Excellence in Institutions/Universities of repute to foster research and training on consumer related issues.

2. Projects for spreading consumer literacy and awareness.

3. Grants for establishment of State Consumer Welfare (Corpus) Fund.

Grants from Consumer Welfare Fund is given to States/UTs for creating a State/UT level Consumer Welfare (Corpus) Fund upto a seed money upto Rs. 20.00 Crore. The contribution of Centre and State/UT is in the ratio of 75:25 (90:10 in the case of Special Category States/UTs), in the corpus. The money is to be deposited in a dedicated interest bearing bank account in any Nationalised Bank to be opened and operated by the concerned State/UT. The interest generated out of the Corpus Fund is to be used by the State/UT for consumer welfare activities as per the extant CWF Guidelines and directions of the Central Government. The concerned State/UT government has to furnish to the Central Government, details of interest accrued, activities undertaken out of the above interest, Audited statement of accounts, details of the account, proof of the State share deposited etc. as required by the Central Government.