GST Administrative Adjustment

by Frankie
(Cranbrook, BC)

How to Record CRA Administrative Adjustments

How to Record CRA Administrative Adjustments

When you file sales tax with a balance of less than $2.00 the CRA states that a sales tax balance will not be charged (or refunded). On my Notice of Assessment it lists this as an "Administrative Adjustment". How should I record this? Does it offset another expense? If so which one?


section divider

Great question.

I don't know how others handle this, but I enter a bill and / or credit memo for any administrative adjustment with Receiver General as the supplier / vendor.

When you filed your return, you will have the $2 liability sitting in A/P or GST/HST Suspense (if you use QBO). Therefore your offsetting entry needs to "pay" the liability outstanding. Make sense? After you create the credit memo for this, you will have to ensure you apply the credit to the liability to clear it from your books.

If you are ever charged penalties and/or interest, then I expense this to an account called CRA Interest & Penalties because it is not tax deductible.

Also to make reconciliations easier, I usually have three suppliers/vendors for CRA. One to track sales tax related payments, another for tracking payroll related payments and the last one is to track income tax related payments.

So if this were my books, my supplier/vendor would be Receiver General - GST/HST.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Ask a Bookkeeping Question.

Share this page:
Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.

Enjoy A Tea Break With
Me Today. Let's Chat!

Use the search feature to quickly find the
information you're looking for.

Your Learning Curve!


Warm up your tea cup and check out these chats ...

Click on image above to read the chat.

Join Me On Facebook

Help support this site by "liking" me! Here's where I post current information.

Listed Under Websites NOT Local Business.
This website is NOT associated with the business operating in Bonnyville AB.

A Handy Reference