KartavyaDesk

Rule 110 - State Transactions | KartavyaDesk

GFR 2017

Original Rule Text

(a) If a commercial department or undertaking or a regularly organised store department or store section of a department is concerned, or (b) If under the operation of any rule or order, an adjustment would have been made if the particular transaction withState Government were a transaction between two departments of the Central Government.

What This Means

Rule 110 of the General Financial Rules (GFR) 2017 deals with situations where transactions involving State Governments are treated as if they were internal transactions within the Central Government. This essentially means that certain financial dealings with State Governments are handled using the same accounting and adjustment procedures that would be applied if the transaction occurred between two different departments of the Central Government. This rule aims to streamline accounting processes and ensure consistency in how financial transactions are recorded and adjusted.

This rule primarily applies in two scenarios. First, it applies when dealing with commercial departments, undertakings, or organized store departments within the government. Second, it applies when another rule or order dictates that an adjustment would be necessary if the transaction were internal to the Central Government. The effect is that the financial interactions with the State Government are treated as if they are internal central government transactions for accounting purposes.

Ultimately, Rule 110 affects government departments and employees involved in financial transactions with State Governments, particularly those working in commercial or store-related departments. It ensures that these transactions are accounted for in a standardized and consistent manner, mirroring the procedures used for internal Central Government transactions. This promotes transparency and simplifies reconciliation processes.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Applies to transactions with State Governments.
  • •Treats certain State Government transactions as internal Central Government transactions.
  • •Relevant for commercial departments, undertakings, and store departments.
  • •Ensures consistent accounting and adjustment procedures.
  • •Triggered when another rule necessitates an internal adjustment.

Practical Example

The Central Public Works Department (CPWD) needs to procure cement from a State Government-owned cement factory in Rajasthan. The total cost of the cement is INR 50,00,000. According to existing guidelines, if CPWD were procuring cement from the National Buildings Construction Corporation (NBCC), a central government undertaking, an internal adjustment would be made in the accounts to reflect the transfer of funds. Rule 110 dictates that the transaction with the Rajasthan State Government cement factory should be treated similarly. Therefore, the CPWD will follow the same adjustment procedures as if the cement was procured from NBCC, ensuring consistent accounting practices.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What is the main purpose of Rule 110?▼
The main purpose is to ensure consistent accounting and adjustment procedures for certain transactions with State Governments, treating them as if they were internal transactions within the Central Government.
When does Rule 110 apply?▼
It applies when dealing with commercial departments, undertakings, or organized store departments, or when another rule or order dictates that an adjustment would be necessary if the transaction were internal to the Central Government.
Who is affected by Rule 110?▼
Government departments and employees involved in financial transactions with State Governments, particularly those working in commercial or store-related departments, are affected by this rule.
What kind of 'adjustment' is referred to in Rule 110?▼
The 'adjustment' refers to the accounting entries and procedures used to reflect the transfer of funds or resources between different departments or entities. It ensures that the financial records accurately reflect the transaction.
Where can I find the specific guidelines for these 'adjustments'?▼
The specific guidelines for these adjustments are usually detailed in the accounting manuals and circulars issued by the Controller General of Accounts (CGA) and relevant departmental instructions.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Rule 110 of GFR 2017, under what circumstance are transactions with a State Government treated as if they were transactions between two departments of the Central Government?

Related Rules

Rule 271General Financial Rules 2017 (amended July 2024) - Rule 271 - Chapter 10Rule 109General Financial Rules 2017 (amended July 2024) - Rule 109Rule 146General Financial Rules 2017 (amended July 2024) - Rule 146 - Chapter 6Rule 169General Financial Rules 2017 (amended July 2024) - Rule 169 - Chapter 6Rule 215General Financial Rules 2017 (amended July 2024) - Rule 215 - Chapter 6

Need help understanding this rule?

Ask Niti — your AI assistant for GFR 2017 and other government rules