CMP 08 - Negative Liab, Composition Tax Payer

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Negative Liability Appearing in GSTR 4



Completion of annual return by Composite taxpayers. – Negative Figure on GSTR-4

22/07/2021

 

Completion of annual return by Composite taxpayers. - Negative Liab in GSTR-4 conditions has come to the point where taxpayers report negative liab from their GSTR-4

Background: From FY 2019-20, composition taxpayers must pay the Liab in Form GST CMP-08 on a quarterly basis while GSTR-4 Return is required to be filed annually after the end of the financial year.

 

Reason for Bad Debt on GSTR4: A full year liab is required to be declared in GSTR-4 under applicable tax rates. Taxpayers must complete table 6 of GSTR-4 mandatorily . If possible, no Liab, the specified table can be filled with a value of '0 '. If no Liab is declared in Table 6, it is assumed that no Liab is required to be paid, even if the taxpayer may have paid the debt in Form GST CMP-08. In such cases, the GST CMP-08 payable debt is tax deductible and is transferred to a neg Liab statement to be used equally in the next tax period.

 

What did the Taxpayer wrong: The Liab paid on Form GST CMP-08 is automatically filled in Table 5 of GSTR-4 for the convenience of taxpayers. Taxpayers who do not complete Table 6 of GSTR-4 e.g. as the 'Payment Tax' on GSTR-4 is calculated after deducting the debt declared in GST CMP-08 and automatically filling in table 5. Therefore, if nothing is declared in table 6, then the Negative Liab. are from GSTR-4. .

 

Proceed in the event of Negative Liab: If table 6 of GSTR-4 has not been completed due to oversight, a ticket may be raised to make the amount available on the bad credit statement. If there is no debt to be repaid during the year, the debt paid in Form GST CMP-08 will go to the Neg Liab statement and the same excess amount may be used to repay the debt for future tax periods.

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