FAQs – Negative Liability Statement

Overview

1. What is a Negative Liability Statement?

In case there is any negative liability in a tax period and no amount is payable during that tax period by the taxpayer, then such negative liability is maintained by the GST Portal in Negative Liability Statement. The Balance, if any, lying in the Negative Liability Statement, will automatically be adjusted against the liability of subsequent tax period(s). The Negative Liability Statement is only for view purpose by the taxpayers and cannot be edited.

For Example: Composition taxpayers reports the liability as net of credit/debit notes. In some cases, value of credit notes exceeds the value of outward supplies. In such cases, the liability becomes negative. In such rare scenarios, where the taxpayers have negative liability in Form GST CMP-08 or Form GSTR-4 (Annual), the same is posted to Negative Liability Statement.
For E.g.: If Tax Amount of Outward Supplies (CGST+SGST/IGST) = Rs 2,00,000 and Tax Amount of credit notes (CGST+SGST/IGST) issued = Rs 2,50,000, then negative liability = -50000

DescriptionIGSTCGSTSGSTTotal
Tax component on Outward supplies during a tax period say Q1100,00050,00050,0002,00,00
Tax component of credit notes issued during the tax period Q11,00,00070,00070,0002,50,000
Negative Liability (available for utilization towards supplies in future tax periods) -10,000-20,000-20,000-50,000
Tax component on Outward supplies made during next tax period say Q210,00015,00015,00040,000
Tax amount adjusted against the Negative Liability10,00015,00015,00040,000
Negative Liability (available for utilization in future tax periods) say Q30-5,000-5,000-10,000

In above example, Rs 50000 will be posted as a credit entry in the Negative Liability Statement.
In the next tax period if the total liability is Rs 40,000, then out of Rs 50,000, Rs 40,000 will be utilized. Then, there will be a debit entry posted in the Negative Liability Statement for Rs 40,000 and so on & so on.

2. Who are the taxpayers for whom the Negative Liability Statement is maintained?

The Negative Liability Statement is maintained for taxpayers registered under composition levy as of now. 

Viewing and Downloading Negative Liability Statement

3. Where can the taxpayers view and download their Negative Liability Statement?

The Negative Liability Statement can be viewed for a maximum of 12 months at a time in the post-login mode by navigating Services > Ledgers > Negative Liability Statement.
Negative Liability Statement can be downloaded in CSV format using the DOWNLOAD AS CSV button available on the bottom of the page. 

4. What is the meaning of Debit/Credit as displayed in Negative Liability Statement?

The meaning of Debit is that the amount is debited or utilised and meaning of Credit is that the amount is credited or posted.

5.  Is the Negative Liability Statement maintained separately for reverse charge and other than reverse charge liability? 

Yes, the Negative Liability Statement is maintained for both reverse charge and other than reverse charge liability separately via different columns for each. 

6. Can a GST Practitioner view my Negative Liability Statement?

Yes, a GST Practitioner can view your Negative Liability Statement who has been authorized by you.

Adjusting Negative Liability

7. As a taxpayer, I had some negative liability which was posted to Electronic liability register part -1. What will happen to such balances?

In case there is some negative liability amount which is posted to Electronic Liability Register part-1, the same will be transferred to the Negative Liability Statement. 
Note: With the introduction of Negative Liability Statement, all the entries related to negative liability as well as adjustment of negative liability towards liability of succeeding tax periods is made through the Negative Liability Statement and not from the Electronic liability register part-I.

8. I have negative liability arising out of one type of Statement / Return.  Can such negative liability be adjusted towards payment of liability of some other Statement / Return?

The negative liability arising from one Statement / Return can be adjusted against the liability of other Statement / Return.
For example: You have some negative liability from Form CMP-08, the same can be adjusted while you are filing form GSTR-4, if there are any liabilities to be paid. 

9. Can I adjust the negative liability arising from return for the payment of non-return liabilities?

No, the negative liability, if any, arising from returns (Form GST CMP-08 or Form GSTR-4 Annual) cannot be adjusted for the payment of non-return related liability.

10.  I have some balances in Negative Liability Statement. Can I make payments without using the same?

No, you cannot make any payments related to returns (Form GST CMP-08 or Form GSTR-4 Annual) without using the balance as available in Negative Liability Statement. 

11. Can negative liability arising under one head can be adjusted towards some other head? 

No, negative liability arising under one major head cannot be adjusted towards some other major head.