GFR Rule No. 110

🔸When Adjustment is Necessary | Financial Accountability Between Government Departments

Every day, government departments exchange goods, services, and resources, but when is an actual financial adjustment mandatory?
That’s exactly what Rule 110 of the General Financial Rules (GFR) 2017 explains.

🔸What Rule 110 Says:
Rule 110, titled “When Adjustment is Necessary,” states that whenever a transaction involves a commercial department, government undertaking, or regular store department, a financial adjustment must be made, unless both the Central and State Governments have agreed otherwise.

In simple terms, whenever one department supplies goods or services to another, the payment or adjustment must be properly recorded in government accounts.

🔸Example:
Suppose the Central Government’s Store Department supplies office furniture to a State Government department. This counts as a commercial transaction, and hence, a financial settlement is mandatory. No “approximate adjustment” is allowed; a clear and accurate accounting entry must be made.
Rule 110 also emphasizes that if such an adjustment is required between Central Government departments, the same rule applies to transactions between the Centre and a State Government.

🔸Purpose of Rule 110:
• Ensures transparency in government-to-government financial dealings.
• Promotes consistency in accounting between Centre and States.
• Strengthens accountability for every commercial or store-based transaction.
• Maintains financial discipline across departments.

🔸In Simple Words:
Rule 110 of GFR 2017 makes it mandatory to record financial adjustments whenever there’s a commercial or store-related transaction between departments — whether it’s Centre-to-State or Centre-to-Centre. This rule strengthens India’s system of financial clarity and accountability in government operations.

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