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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.
GST
Negative liability in CMP-08
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Provisions
Rule 62, CGST Rules 2017; Sec 34, CGST Act 2017
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.
Close
- Record sales returns and credit notes for the quarter.
- Enter them in CMP-08.
- Check the carried forward balance next quarter.
- Keep supporting documents.
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