The GST portal has enabled a new invoice management system (IMS) to facilitate invoice corrections and revisions from October 14th, 2024. The IMS enables recipients to review and approve or reject invoices submitted by vendors in GSTR-1, IFF, or 1A.
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What is an Invoice Management System?
Recipients can accept, reject, or hold invoices in IMS. In their GSTR-2B, the accepted invoices would prompted and the rejected or due invoices shall not. If there is no measure opted then the invoices are considered accepted.
The suppliers would be required to address any revisions or corrections before filing GSTR-1 or GSTR-1A. The supplier’s GSTR-3B obligation shall be affected when the recipients reject invoices or credit notes in the forthcoming durations.
The system would have the objective to rectify the precision and compliance in the GST reporting, mandating the recipients to opt the timely measures and maintain the records. The automated and manual measures along with compliance with section 16(4) of the CGST act are important for accurate tax management.
Latest Update
- Taxpayers have reported that their GSTR-2B for October 2024 was not generated on November 14, 2024. Click to read the advisory
- New Advisory on Supplier View Functionality under IMS (Invoice Management System). Read more
- The new advisory from the Invoice Management System (IMS) is related to the implementation of the system during the initial phase. View more
- More important FAQs on the Invoice Management System (IMS), click to read
- The Invoice Management System (IMS) is now accessible for taxpayers registered under the Goods and Services Tax (GST) starting from October 14, 2024. View more
- GSTN new advisory for Draft Manual on Invoice Management System to keep pending invoices. Read PDF
- IMS would allow taxpayers to accept, reject, or keep invoices pending straight via the portal.
- 54th GST Council Meeting – IMS will allow taxpayers to declare their opening balances for these ledgers by October 31, 2024.
Invoice Management System Features
Manage Invoices in Real Time: The assessee can view and choose action on invoices uploaded via suppliers in real time. The system permits the businesses to handle their invoices efficiently, assuring that no ITC entitled is absent or claimed erroneously.
Supplies of Inbound and Outbound: Two sections are been furnished by the IMS dashboard one to manage the inward supplies (invoices from suppliers) and the other for the outward supplies (invoices issued before the customers). The outward supplies section will be available, and the inward supplies can be handled quickly.
Improve ITC Accuracy: IMS furnishes a chance to scrutinize invoices before they are regarded for ITC claims. The accepted invoices shall contribute to the ITC computation in GSTR-2B while rejected invoices shall not be included in the ITC pool.
Decisions on invoices:
- Accept: In GSTR-2B the invoice is valid and shall be regarded for ITC
- Reject: The invoice is wrong, and no ITC shall be claimed
- Pending: Thereafter the invoice shall be analyzed and no measure shall be opted till then
Deemed Acceptance: If no action is been undertaken via the assessee the system automatically considers the invoices as accepted on the generation of GSTR-2B dated the 14th of every month.
Flexible Calculating of GSTR-2B: The assesses can carry on to edit their measures on invoices even after the draft GSTR-2B is generated. If a taxpayer modifies any information after the 14th of the month, they need to recalculate GSTR-2B before submitting GSTR-3B.
Functionality in Bulk Action: To streamline extensive transaction volumes, IMS enables taxpayers to simultaneously accept, reject, or flag multiple invoices as pending. A bulk selection feature guarantees efficient handling of numerous invoices.
IMS Dashboard New Guidelines for Deemed Acceptance and Record Handling
Updated guidelines for managing the records on the Invoice Matching System (IMS) dashboard have been introduced by the Goods and Services Tax (GST) framework to rectify the clarity and facilitate the GSTR-2B reconciliation procedure.
All New Highlights
- Flow of Records to GSTR-2B: Merely the records that are saved and filed via the supplier would flow from IMS to GSTR-2B. The accepted records would not be included in the current return period GSTR-2B have been saved but not filed via the supplier of filed after the GSTR-2B cut-off date. The same measures ensure that merely the whole processed records are comprised in the final reconciliation.
- Deemed Acceptance: Any IMS record where the recipient does not take any action will now be considered as ‘Deemed Accepted.’ For the users who do not answer the records listed on the dashboard the same automatic acceptance is been applicable.
- Deleted Records: When a record has been removed by the supplier from their return after the recipient has acted on the same before then the record will indeed disappear from the IMS dashboard of the recipient ensuring an updated and precise record display.
- Handling of Supplier Changes: If a supplier amends to a saved record in their respective return and the recipient has taken the action before on the record then it will reset in the IMS. the same revised record will appear as a new entry for the recipient permitting a fresh review of any updated data.
Such measures can decrease discrepancies in GST compliance, which makes it simpler for businesses to handle the ITCs and facilitate their tax filing process. The tax professionals suggest analyzing the IMS dashboard records to prevent the Deemed Acceptance and ensure precise record keeping.
What is The Way to Use the IMS?
Access the GSTN Official Portal: Log in to the GST portal (www.gst.gov.in), navigate to Services > Returns > Invoice Management System (IMS), and view the available invoices.
Consider Inbound Supplies: The inward supplies notified from the suppliers are classified into accepted, rejected, pending, or no-action-taken invoices. The assesses are authorized to filter such records based on distinct criteria like GSTIN or invoice date.
Take Action: Choose the invoices you want to act on. You can individually or in bulk accept, reject, or keep them pending. Tap on the save button to finalize your decision after selecting the action.
Download Records and Documents: IMS furnishes a typical Excel download option for the assesses to analyze their invoices offline.
In What Way Does the IMS (Invoice Management System) Work Under GST?
Once a supplier saves an invoice in their GSTR-1 then the same would appear in the IMS dashboard of the recipient assessee.
The recipient could choose to accept, reject, or leave the invoice pending.
Accepted invoices would automatically become the portion of the receiver’s GSTR-2B as eligible ITC, which would then populate in their GSTR-3B for the respective tax duration.
When there has been no measure towards an invoice, the same would be regarded as accepted and comprised in GSTR-2B.
This system would ensure that merely the genuine and verified invoices would contribute to the ITC claims lessening the errors and discrepancies in tax filings.
Major Points
- Exclusively the accepted invoices via the recipients shall become part of GSTR-2B and the flow in distinct tabs of GSTR 2B
- Based on the action that the recipient has taken a draft GSTR-2B will be made available to the recipient on the 14th of the forthcoming month
- The recipient can take measures of accept/reject or keep pending even after the generation of GSTR-2B till the filing of GSTR-3B and when the recipient has proceeded with the measures on any invoice post-14th of the month, he shall be needed to again calculate the GSTR-2B. Therefore GSTR 2B recomputing facility would be enabled.
- After the filing of GSTR-3B for a certain month, the recipient can not take measures on an invoice
- GSTR 2B for the following month can be generated merely after filing the previous GSTR 3B
- The taxpayers can claim the invoices that shall kept pending at any forthcoming point of time however not after the set limits by Section 16(4) of the CGST Act, 2017
- Obligation measure to be taken Original ‘Credit note’, ‘Upward amendment of the credit note’, and ‘Downward amendment of the credit note if original credit note was not accepted by recipient’
- It is feasible for the supplier to see what measure has been opted for by the recipient on the invoices in IMS
- On the original record, it is important to take action and furnish the respective GSTR 3B before taking action on the amended record (amended through GSTR-1A/GSTR-1) when the original and amended record is of two different GSTR 2B return periods. If both the records are of the same period’s 2B, merely revised records would be regarded for the ITC computation of GSTR 2B
- The records/invoices saved or filed via IFF by a QRMP taxpayer will flow to IMS for the recipient
- GSTR-2B for a QRMP taxpayer will be generated every quarter
- Inward RCM supplies where the supplier has notified in Table 4B of IFF / GSTR 1 or GSTR 1A and supplies where ITC is not suitable due to section 16(4) of CGST Act or on account of POS rule, both such supplies will not move to IMS and will be directly populated in the GSTR 3B
IMS Provides Numerous Benefits for GST Taxpayers
Let’s follow a few important new Invoice Management System (IMS) offers, which provide several advantages to taxpayers.
- Through the analysis of each invoice, before it becomes part of their ITC claims, the assessees can ensure precision and prevent issues during audits.
- Before filing their GSTR-3B, the assessee must act on the invoices.
- In the forthcoming tax periods, the pending invoices can be addressed.
- The IMS for those who use the quarterly return monthly payment (QRMP) scheme will integrate with their existing processes, which generate the GSTR-2B quarterly, in line with their filing schedule.
IMS Impact in GSTR-2B and GSTR-3B
Draft GSTR-2B Generation: The system on the 14th of March of each month shall generate a draft GSTR-2B for the taxpayer along with all the accepted and no action chosen invoices. The same draft could be regarded as the final GSTR=2B if no additional measures are opted.
Recomputing GSTR-2B: If on the invoices any measure is taken after the draft is generated then the assesses are needed to recompute their GSTR-2B before GSTR-3B filing to show the updated ITC information.
What Does the Same Mean for the Software Companies and GST Authorities?
The IMS depicts a transformation in the tax filing process that requires software companies to adapt their systems to align with the same new operationality.
The IMS for the tax authorities furnishes a clear and reliable system to track the ITC claims, which is directed to future automation opportunities.
AI-driven analysis and automated dispute resolution features can be feasible.
Tax experts remarked that the new advisory from GSTN shows a complete overhaul of the tax filing procedure.
It is tough to have a transition, however, it is important to adapt to the rising statutory environment.
Tax experts stressed that the same move can make the way for the forthcoming advancements in the GST system along with AI integration and rectified fraud detection.
