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3B negative Liability

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CA NAMRATA KAYARWAR

20 Points Posted on 11 November 2022

In case of whole sale books suppliers in Jan to Mar months they have huge supplies but in the month aug sep n Oct there is only sales return. in R1 we issue credit note n our liability is negative. But how to reverse the tax liability in 3b on which tax has been already paid. can we show negative figure in 3b n reduce subsequent months liability or reclaim itc which was utilized for payment of such tax.
please suggest how to deal with this situation.
Thanks in advance 🙏

Replies (2)

Quick Summary

This discussion addresses the challenge of negative tax liability arising from significant sales returns during certain months, particularly for wholesale book suppliers. The core issue is how to reverse the GST liability on which tax has already been paid when credit notes are issued. The advice provided suggests showing a negative figure in the 3B to reduce subsequent months' tax liability, rather than reclaiming input tax credit that has already been utilised for payment.