12 July 2024
To address the issue of negative liability balance in the GST portal and enable the creation of CMP-08 return for the October to December 2021 quarter under the Composition Scheme, here are the steps you can take:
### Understanding Negative Liability Balance
A negative liability balance typically occurs when the amount of input tax credit (ITC) claimed in GSTR-3B or other returns exceeds the output tax liability. This can happen due to excess ITC claims or adjustments made in subsequent returns.
### Steps to Resolve Negative Liability Balance Issue:
1. **Check Liability Ledger:** - Log in to the GST portal and navigate to the "Ledgers" section. - Review the liability ledger to understand the nature of the negative balance and the period it pertains to.
2. **Verify GSTR-3B and Other Returns:** - Verify the GSTR-3B filed for the relevant periods. Ensure that all adjustments and ITC claims are correctly reported.
3. **Reconcile Input Tax Credit:** - Ensure that all input tax credits claimed are reconciled with the purchases and services used for business purposes. Rectify any discrepancies.
4. **Adjustments in GSTR-1 or GSTR-3B:** - If there are any incorrect adjustments or amendments needed in GSTR-1 or GSTR-3B for earlier periods, revise them accordingly to correct the balance.
5. **Utilize DRC-03 for Payment:** - If the negative liability is genuine and you need to clear it, use the DRC-03 form on the GST portal. - Navigate to Services > User Services > My Applications > Application Type > DRC-03. - Fill in the required details, including the amount to be paid to clear the liability. - Select the appropriate tax period and tax type (CGST/SGST). - Make the payment through the available modes (e.g., net banking, credit/debit card).
6. **Generate Challan (If Applicable):** - After clearing the negative liability through DRC-03, return to the CMP-08 filing section. - Attempt to create a new CMP-08 return for the October to December 2021 quarter. The portal should now allow you to proceed since the negative balance issue should be resolved.
7. **File CMP-08 Return:** - Once the CMP-08 return creation is enabled, fill in the details for sales turnover, tax paid (CGST and SGST), and other required information. - Verify the return summary and submit it.
### Additional Tips:
- **Consult with a GST Practitioner:** If you encounter difficulties in understanding or resolving the negative liability issue, it’s advisable to seek assistance from a GST practitioner or consultant.
- **Regular Reconciliation:** Ensure regular reconciliation of tax payments and credits to avoid negative liability situations in the future.
By following these steps, you should be able to resolve the negative liability balance issue on the GST portal and successfully file your CMP-08 return for the specified quarter under the Composition Scheme.
CAclubindia
