Goods and Services Tax Network (GSTN) is always trying to make the GST Compliance easier for taxpayers. From the financial year 2019-20 onwards, composition taxpayers were required to report and pay their liability through Form CMP-08 on a quarterly basis and file their annual returns in GSTR 4. In a further attempt, GSTN has recently issued a new advisory for the composition taxpayers.

The requirement of Table 6 in GSTR 4

As per the new advisory released by the GSTN, the entire year’s liabilities must be declared in table 6 of GSTR 4 and if there is no liability, the table can be populated with zero value.

In the current scenario, 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 CMP-08. In such cases, liability paid through CMP-08 becomes excess tax paid and moves to Negative Liability Statement for utilization in subsequent tax periods.

Example of current scenario:

Liability auto-populated in Table 5 (auto-populated from CMP 08)
CGST – Rs. 15,000
SGST – Rs. 15,000

Liability auto-populated in Table 6
CGST – Nil
SGST – Nil

Negative liability in GSTR 4
CGST – Rs. 15,000
SGST – Rs. 15,000

(Liability already paid through CMP 08
CGST – Rs. 15,000
SGST – Rs. 15,000)

Cause of Negative Liability in GSTR 4

For the taxpayers’ convenience, the liability paid using CMP-08 is auto-populated in table 5 of GSTR-4. The tax payable in GSTR-4 is computed after reducing the liability declared in table 5. Where no liability is declared by the taxpayer in table 6 and liability is auto-populating in table 5, despite the fact that the taxpayer has paid liability through CMP 08, negative liability entry appears in GSTR-4.

Table 5 of GSTR 4

Table 6 of GSTR 4

Additional Instructions in the advisory for the taxpayers

It is observed that some taxpayers are using the amount available in the negative liability statement to pay the liability while filing CMP-08 or GSTR-4 for subsequent tax periods.

In such circumstances, the cash ledger has been debited by the GSTN with the amount used from the negative liability statement. Such liabilities should be settled by depositing the funds through challan.

The taxpayers are advised to deposit the past liability through challan of an equal amount urgently.

Note: If the liability has been paid by transferring it to the following year’s liability, the same can be claimed as a refund using Form GST RFD-01.

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