As can be understood from social media post of many of the Chartered Accountants and tax consultants that they are facing issue of ‘Adjustment of negative GST liability of previous tax period’ while filing PMT 08 of Q-1 of FY 2021-22 for composition dealers.
Cause of Problem
At the time of filing GSTR 4 of FY 2019-20 or FY 2020-21 or both, you may have missed to put liability figure in table 6 of GSTR 4. You may find the Negative liability statement on GST portal under Services>Ledgers>Negative Liability statement.
Solution
According to me following can be the solution:
Let us take up an example that You have liability of Rs. 10000 for FY 2019-20 and Rs. 15000 for FY 2020-21. For Q-1 2021-22 liability is Rs. 3500
1. You should pay Rs. 3500 in cash ledger.
2. Pay Rs. 3500 by DRC 03 for Annual Return for FY 2019-20
3. File PMT 08 by adjusting Rs. 3500 from negative liability of previous period.
4. Keep the track of the liabilities paid by DRC-03.
5. Repeat all above steps till all the liability of FY 2019-20 and FY 2020-21 are not paid by DRC-03 for coming quarters.
The above solution is not the perfect legal solution but the only possible solution at the moment. Department at later stage may ask for interest which can be contested on the ground that we have paid all the tax by PMT 08 on or before the due date and also debited from the cash ledger and we have not claimed the refund of the tax paid at any stage from the government.
The views suggested above are strictly for the knowledge sharing purpose and not a legal opinion.
Author Bio
We have negative liability adjustment for a client of fy 20-21.As the September return ks filed can we still make the adjustments of py in current period?
HI, Thank you for the post. it is very helpful.
I have paid GST as per your post under DRC 03. But when filing annual return for 21-22, Do I need to show outward supply under serial no. 6 as actual outward for the year or I need to show outward actual + outward supply for which it was calculation supply negative liability?
Please help me with this.
Thank you for your support.
Sir,
A composite tax payer CMP-08 show in sales turnover f.y.19-20 rs:25 lacs.but dealer mistake sales turnover not reported column no.6 in gstr4 annual return filed19-20 .dealer cmp-08 return April-june 21 1st quarter sales turnover rs:4 lacs create challan options not enable negative liability statement adjustment.
1.dealer sales turnover Apr to June-21 show in only CMP 08 or previous year 19-20 sales turnover both show in cmp-08
2.dealer challan create which sec applicable and tax pay previous year only or interest applicable.
Could you please help us regarding under which section shall the payment will be made for DRC-03?
Select the payment against Annual return. Section 73(5) will be automatically selected.
WHAT IF IT IS ADJUSTED IN CURRENT QTR CMP-08 BY SHOWING EXCESS TAX LIABLILITES AND IN CURRENT YEAR GSTR-4 TABLE 6 WE SHOW CUMMULATIVE TAX LIABLILIES??
CAN WE?
BECAUSE BY DRC-03 OPTION THIS MIGHT BE NOT ADJUSTED FOR 2-3 YRS
That’s also one of the possibile solution I thought initially but legally we don’t have such option. Legally you have pay by DRC-03.
Negative liability is appeared because of not declaring outward supply in table 6 of Annual return.
From this dept returned all our payment to negative credit ledger.
If we adjust this by paying partially dept may ask for interest for negative balance credited.
Dear Sir
Unable to view Negative liability ledger in DRC-03 at the time of setoff. I have selected whole year that is FY 2019-20.
Please read the entire article again.
thanks for sharing the information, very useful