Gstn Removes Negative Balance In Cash Ledger

In a major relief to composition taxpayers, the Goods and Services Tax Network (GSTN) removed negative liability/balance from the cash ledger on 8th July 2022. Due to the reversal of the amount in the cash ledger of some composition taxpayers, the balance in the cash ledgers had become negative; therefore the government has decided to nullify the negative balance. The concerned taxpayers can now verify and file the Annual Return in GSTR 4 for FY 2021-22 by 28th July 2022. Click here to know more about GST Electronic Cash Ledger

Earlier GSTN Advisory to Composition Taxpayers on Negative Liability

Earlier, in April this year, GSTIN 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.

Negative Liability Statement

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.

Note on CMP-08 and GSTR-4

CMP-08 is a quarterly challan-cum-statement to be submitted by the taxable composition persons. It is known as the “statement of self-assessed tax”. The statement will consolidate the turnover and tax payable details for the particular quarter and allow the taxpayer to make tax payments. GSTR-4 is the annual return filed by all the composition taxable persons on or before 30th April following a particular financial year. It contains a yearly consolidated summary of turnover of the financial year, tax liability, and tax paid details.

Procedure to View the Negative Liability Statement

The Negative Liability Statement can be accessed on the GST portal after logging into the GST portal.

The taxpayer needs to access the GST portal and navigate to the “Services” and Select the “Ledgers” option.
Click on the “Negative Liability Statement” button to view the Negative Liability Statement.

Reason for Removing Negative Liability by GSTN

As mentioned above, Due to the reversal of the amount in the cash ledger of some composition taxpayers, the balance in the cash ledgers had become negative. The government has now decided that the negative balance in the cash ledgers of such taxpayers should be nullified. Accordingly, the negative balance has been nullified. All such taxpayers have been informed through email also. Click here to get the official Advisory of GSTN pertaining to the Gstn Removes Negative Balance In Cash Ledger

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Frequently Asked Questions

Common questions about GSTN Negative Balance Removal for Composition Taxpayers.

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, which will be carried forward to the next quarter for adjustment against the next quarter's liability. It helps taxpayers keep track of any negative balance in their cash ledger.

Due to the reversal of the amount in the cash ledger of some composition taxpayers, the balance in their cash ledgers had become negative. To resolve this issue, the government decided to nullify the negative balance, allowing these taxpayers to file their Annual Return in GSTR 4 for FY 2021-22 by 28th July 2022.

CMP-08 is a quarterly challan-cum-statement submitted by composition taxable persons. It consolidates the turnover and tax payable details for the particular quarter. Any negative summary in CMP-08 for the present quarter would be carried forward to the next quarter, leading to a negative balance in the cash ledger.

Earlier, in April 2022, GSTN had requested taxpayers with a negative balance in their cash ledger to deposit an amount equal to the negative balance urgently. However, after receiving reports of issues from taxpayers, GSTN decided to remove the negative balance instead.

Composition taxpayers can view the Negative Liability Statement on the GST portal by logging in, navigating to the "Services" section, selecting the "Ledgers" option, and clicking on the "Negative Liability Statement" button.

GSTR-4 is the annual return filed by all composition taxable persons on or before 30th April following a particular financial year. It contains a yearly consolidated summary of turnover, tax liability, and tax paid details. By removing the negative balance, GSTN has enabled composition taxpayers to file their GSTR-4 for FY 2021-22 by 28th July 2022.

GSTN sent emails to all taxpayers affected by the negative balance issue, informing them that the negative balance in their cash ledgers has been nullified.

The cash ledger in GST is an account maintained on the GST portal for each taxpayer, where all tax payments and liabilities are recorded. It helps taxpayers keep track of their tax payments and outstanding liabilities.

While the article specifically mentions the removal of negative balance for composition taxpayers, it is possible for the negative balance issue to occur for non-composition taxpayers as well, depending on the specific circumstances and transactions.

If taxpayers continue to face issues with the negative balance in their cash ledger after GSTN's action of nullifying the balance, they should reach out to GSTN or seek professional assistance to resolve the issue promptly.