Negative liability in GSTR-3B
This query is : Resolved
Quick Summary
27 December 2025
In the month of January 2025, we had reported advance income in GSTR-1. While adjusting the said advance against actual sales, the adjustment amount exceeded the taxable sales, due to which sales in GSTR-3B became negative.
Whether the negative sales shown in GSTR-3B can be adjusted in the subsequent tax periods or in the next financial year?
If yes, within what time limit such adjustment is allowed under GST law?
Whether we are eligible to claim a refund of the excess tax paid due to such adjustment?
Whether the negative sales shown in GSTR-3B can be adjusted in the subsequent tax periods or in the next financial year?
If yes, within what time limit such adjustment is allowed under GST law?
Whether we are eligible to claim a refund of the excess tax paid due to such adjustment?
28 December 2025
Adjustment of Negative Sales
The negative sales (net of adjustments) shown in your GSTR-3B can be adjusted in subsequent tax periods.
Mechanism: Effective January/February 2025, the GST portal allows for direct entry of negative values in Table 3.1 of GSTR-3B.
Negative Liability Statement: If your net liability for a month is negative, this amount is credited to a Negative Liability Statement. This balance is then automatically adjusted against your positive tax liability in the next tax period(s) until exhausted.
The negative sales (net of adjustments) shown in your GSTR-3B can be adjusted in subsequent tax periods.
Mechanism: Effective January/February 2025, the GST portal allows for direct entry of negative values in Table 3.1 of GSTR-3B.
Negative Liability Statement: If your net liability for a month is negative, this amount is credited to a Negative Liability Statement. This balance is then automatically adjusted against your positive tax liability in the next tax period(s) until exhausted.
28 December 2025
Time Limit for Adjustment
Under current GST law and system updates:
No Expiry on Statement Balance: Once a balance is posted to the Negative Liability Statement, it remains available for automatic adjustment in future tax periods with no specific time restriction for its exhaustion.
Reporting Corrections: General corrections or amendments to returns for a financial year must typically be completed by November 30 of the following financial year or before filing the Annual Return, whichever is earlier. However, once a negative balance is recognized in the portal’s ledger, it carries forward indefinitely until utilized.
Under current GST law and system updates:
No Expiry on Statement Balance: Once a balance is posted to the Negative Liability Statement, it remains available for automatic adjustment in future tax periods with no specific time restriction for its exhaustion.
Reporting Corrections: General corrections or amendments to returns for a financial year must typically be completed by November 30 of the following financial year or before filing the Annual Return, whichever is earlier. However, once a negative balance is recognized in the portal’s ledger, it carries forward indefinitely until utilized.
28 December 2025
Eligibility for Refund
Yes, you are eligible to claim a refund of excess tax paid if it cannot be adjusted against future liabilities.
Grounds for Refund: You can file a refund application under the category "Excess payment of tax" using Form GST RFD-01.
Conditions:
The refund claim must exceed ₹1,000.
You must file the claim within two years from the date of the actual tax payment (the "relevant date").
If the refund amount exceeds ₹2 lakhs, a certificate from a Chartered Accountant (CA) or Cost Accountant is required to prove that the tax burden was not passed on to the customer.
Yes, you are eligible to claim a refund of excess tax paid if it cannot be adjusted against future liabilities.
Grounds for Refund: You can file a refund application under the category "Excess payment of tax" using Form GST RFD-01.
Conditions:
The refund claim must exceed ₹1,000.
You must file the claim within two years from the date of the actual tax payment (the "relevant date").
If the refund amount exceeds ₹2 lakhs, a certificate from a Chartered Accountant (CA) or Cost Accountant is required to prove that the tax burden was not passed on to the customer.
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