The Goods and Service Tax Network (GSTN) addressed the instances where taxpayers are reporting negative liability appearing in their GSTR-4.
From FY 2019-20, composition taxpayers have to pay the liability through Form GST CMP-08 on a quarterly basis while GSTR-4 Return is required to be filed on annual basis after the end of a financial year.
The GSTN while stating the reason said that the liability of the complete year is required to be declared in GSTR-4 under applicable tax rates. Taxpayers should fill up table 6 of GSTR-4 mandatorily. In case, there is no liability, the said table may be filled up with a ‘0’ value. If no liability is declared in table 6, it is presumed that no liability is required to be paid, even though, the taxpayer may have paid the liability through Form GST CMP-08. In such cases, liability paid through GST CMP-08 becomes excess tax paid and moves to Negative Liability Statement for utilization of the same for subsequent tax period’s liability.
“Liability paid through Form GST CMP-08 is auto-populated in table 5 of the GSTR-4 for convenience of the taxpayers. Taxpayers who do not fill up table 6 of GSTR-4 i.e. no liability is declared, even though, the taxpayer may have paid the liability through Form GST CMP-08; since the ‘Tax payable’ in GSTR-4 is computed after reducing the liability declared in GST CMP-08 and then auto-populated in table 5. Thus, if nothing is declared in table 6, then the negative liability entry appears in GSTR-4,” the GSTN while pointing out the mistake of the taxpayer added.
If table 6 of GSTR-4 has not been filled due to oversight, a ticket may be raised to nullify the amount available in the negative liability statement. If there is no liability to be paid during the year, the liability paid through Form GST CMP-08 shall move to a negative liability statement and the same excess amount can be utilized to pay the liability of future tax periods.
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