How to file GSTR-3B with Invoice Management System (IMS)

How to file GSTR-3B taking into account The Invoice Management System (IMS)

The IMS has been introduced w.e.f., 1^st October, 2024 to streamline the process of claiming the ITC in GSTR-3B return. With introduction of IMS, the process of claiming ITC would be more streamlined and consistent. Practically speaking, the ITCs taken by the taxpayer were  those that appeared in GSTR-2B of the taxpayer and without proper reconciliations they used to claim the ITC in their 3b returns. Now with the introduction of IMS, the taxpayer needs to reconcile the ITCs at the Invoice level details to compute at the correct ITC figure which is to be reported in GSTR 3B.

What’s the way forward?

Now, the taxpayer needs to prepare two reconciliations, first reconciliation is to reconcile the ITC of books with 2B and the second one, the resultant ITC as per first reconciliation with the IMS dashboard. The ITC computed in the first reconciliation needs to be reconciled with those appearing on the IMS dashboard. The reason for the preparation of the first reconciliation is to compute the overall eligible ITC for e.g., The Invoice of July 2024, the ITC of which was appearing in GSTR 2B of July month claimed in the month of October, 2024 due to the receipt of the goods in the month of October, here the ITC shall not reflect in the 2B of October month, there the first level reconciliation is required in this case.

Process of claiming ITC through IMS:

The taxpayer needs to go under the services(return) tab on the GST portal and ACCEPT those invoices on which the taxpayer is eligible to claim the ITC. The ITC which is not eligible due to non- fulfilment of section 16 of the CGST Act should be marked as PENDING. It is highly recommended not to REJECT any Invoices since rejection of the same shall cause the ITC of those particular invoices to be stale, i.e. it will not be available to be claimed in the future.

How to file GSTR-3B using Invoice Management System:

After considering the steps mentioned above, on the IMS dashboard click on the Compute GSTR-2B tab, clicking on the same would result in the flow of the invoices into the GSTR-3B return of the taxpayer. It is worth mentioning that you cannot keep the Debit notes/Credit notes as pending, either you have to reject it or accept it.

After computing the 2B, go to the return dashboard and select your period of return filing, and fill the relevant figures and then the process is the same as it is used to be earlier.

Some Important Precautions:

1. Avoid rejecting invoices on the IMS dashboard instead keep them Pending.
2. Do not accept all the invoices if you are not eligible to claim ITC on them, it may lead to interest and penalties if the invoices are accepted.
3. If you do not take any action on the IMS dashboard then all the ITCs will auto populate in the GSTR-3B of the taxpayer.
4. Using communicate with tax payer tab available on the portal to communicate with the suppliers about non-reflection of the invoices.
5. Use IMS as a tool for reconciliation.

With the introduction of IMS, the workload on the taxpayers as well as the professionals have increased manifold. However, the benefits accruing from it is higher. It will help in reducing the litigations, notices and helpful in streamlining the process of ITC. Summarising, it is a great tool introduced by the government creating the win-win situation for both the government and the taxpayers.

Also, in case you all need an excel file for the preparing the reconciliations then do let me know in the comment box.