Answer

1. F

   Facts

   If credit notes or returns exceed sales in a quarter, the negative liability is carried forward to the next quarter. It is not refunded in cash at that stage.

2. P

   Provisions and law

   • Rule 62, CGST Rules 2017A composition taxpayer files CMP-08 by the 18th of the month after each quarter and GSTR-4 by 30 June after the year (Notification 12/2024-CT).
   • Sec 34, CGST Act 2017Credit notes and debit notes adjust tax on an invoice; a credit note must be declared by 30 November after the year or the annual return, whichever is earlier.
3. A

   Analysis

   For example, sales of ₹50,000 and returns of ₹80,000 give a negative value of ₹30,000, so tax is nil and the balance reduces next quarter's tax. The portal tracks this. If the business stops, any balance can be considered in GSTR-4. Keep records of the returns and credit notes.

4. C

   Conclusion

   1. 1Record sales returns and credit notes for the quarter.
   2. 2Enter them in CMP-08.
   3. 3Check the carried forward balance next quarter.
   4. 4Keep supporting documents.

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