Due to the reversal of the amount in the cash ledger of some composition taxpayers, the balance in the cash ledgers had become negative. In a major relief to composition taxpayers, the government has now decided that the negative balance in the cash ledgers of such taxpayers should be nullified. Accordingly, Goods and Services Tax Network (GSTN) has removed negative liability/balance from the cash ledger. Such tax payers have been informed through email also.
The concerned taxpayers can now verify and file the Annual Return in GSTR 4 for FY 2021-22 by 28th July 2022. Earlier, in April this year, GSTN had requested the taxpayer to deposit the amount equal to the negative balance in the cash ledger urgently, in case there is a negative balance. And now, after reporting issues of the taxpayers, the system has removed this and has rather removed such negative liability / balance.
It may be noted that since FY 2019-2020, 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 annually after the end of a financial year.
A negative Liability Statement refers to a report available on the GST portal that shows any negative summary in Form CMP-08 for the present quarter that will be carried forward to the next quarter for adjustment against the next quarter’s liability.
Balance in the Negative Liability Statement can be known at the closure of the financial year upon submission of GSTR-4 of previous years.
Source: GST Portal
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