Unable to create challan in GST CMP 08 as tax amount adjusted with Negative Liability

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A composition taxpayer is unable to create a GST CMP-08 challan for the April-June 2021 quarter because their tax amount from FY 2020-21 has been incorrectly credited to the Negative Liability Statement. This prevents them from paying the current quarter's tax in cash. Potential solutions involve adjusting the negative liability tax within the CMP-08, filing a grievance, and writing to the proper officer. However, this method might inflate current year turnover. An alternative suggestion is to pay the FY 2020-21 liability via DRC-03 and use the negative liability statement for the current quarter's tax.

Soumya Laha

Soumya Laha (Querist)

17 July 2021 A Composition Taxpayer didn't fill column 6 of GSTR 4 in FY 2020-21 and total tax paid in FY 2020-21 is credited in Negative Liability Statement. As a result the taxpayer can't able to create challan and pay the tax for APR-JUN qtr 2021 in cash as the tax amount adjusted with Negative Liability. Now, in this situation, what is the suitable solution for this issue.

Ganeshbabu K

Ganeshbabu K (Expert)

17 July 2021 Add Negative liability tax to current CMP08 tax payable, its editable. you can pay CMP08 tax now.

After this file grievance online explaining facts of case. write a letter to proper officer along with facts.

Soumya Laha

Soumya Laha (Querist)

17 July 2021 Suppose Annual Turnover in FY 2020-21 was Rs. 30 lac and due to no filling column 6 of GSTR4, that 30 lac treated as returned sale and tax amount credited in Negative Liability Statement. Now the turnover for APR-JUN qtr 2021 is Rs. 8 lac. But in order to overcome from Negative Liability, the taxpayer need to show (30+8)= 38 lac turnover in APR-JUN 2021 qtr. In this case the turnover for current financial year will be a big amount which is actually not and previous years turnovers remains zero. So, there is a chance of problem arise in future. Kindly give suitable suggestion regarding this issue.

Ganeshbabu K

Ganeshbabu K (Expert)

17 July 2021 Yes, Thats why we are not disturbing Outward Supplies. only Modifying Tax Portion.

and also duly reporting to proper officer and online grievance mode,

this is what currently doing to resolve this mistake and create challan for current month

not aware of another solution possible

Soumya Laha

Soumya Laha (Querist)

17 July 2021 Thanks for your suggestion.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

17 July 2021 Correct Method is to show April- June 2021 turnover only in CMP-08. It is advisable to pay the liability of F Y 20-21 by DRC-03 . and pay tax of current year through negative liability statement.

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