Recent GST advisories from GSTN related to Bank Details, RCM, IMS, GSTR-1

Summary: GSTN has issued several advisories related to portal updates for taxpayer compliance. From September 2024, taxpayers must furnish valid bank account details before filing GSTR-1 or using the Invoice Furnishing Facility (IFF), as per Rule 10A. The new Reverse Charge Mechanism (RCM)/Input Tax Credit (ITC) statement aims to ensure accurate reporting of RCM liabilities and claimed ITC in GSTR-3B. For reporting supplies in GSTR-1 and GSTR-5, GSTN advises continuing to report invoice-wise details of inter-state supplies over ₹2.5 lakh until further updates are made. Additionally, a new Invoice Management System (IMS) will be introduced on October 1, 2024, enabling taxpayers to match, accept, reject, or defer invoices received from suppliers. The IMS will streamline the process of verifying input tax credits, allowing only accepted invoices to reflect in GSTR-2B, thus improving accuracy and transparency in tax filings. These updates are designed to enhance compliance and ease processes for taxpayers on the GST portal.

Common portal of GST, GSTN keeps on issuing advisories on new functions / updates on the portal for upgradation of functionalities and new options or functions enabled for implementation by taxpayers.

During the month of August and September, 2024 so far, the following advisories have been issued so far in relation to the various compliances by GSTN:

• Bank Account details for GSTR-1 and 1/IFF
• Introduction of RCM / ITC Statement
• GSTN Advisory for Reporting Supplies in GSTR 1 and GSTR 5
• New Invoice Management System (IMS)

These are summarized below:

Bank Account details for GSTR-1 and 1/IFF

• GSTN has issued an advisory for furnishing bank account details before filing GSTR-1/IFF in terms of Notification No. 38/2023 – Central Tax dated 4^th August, 2023.
• According to Rule 10A, a taxpayer is required to furnish details of a valid Bank Account within a period of 30 days from the date of grant of registration, or before furnishing the details of outward supplies of goods or services or both in FORM GSTR-1or using Invoice Furnishing Facility (IFF), whichever is earlier.
• Since Rule 10A shall come into force w.e.f. 1 September, 2024, for the Tax period August-2024 onwards, the taxpayer will not be able furnish GSTR-01/IFF as the case may be, without furnishing the details of a valid Bank Account in their registration details on GST Portal.
• All the taxpayers who have not yet furnished the details of a valid Bank Account details should add their bank account information in their registration details by visiting Services > Registration > Amendment of Registration Non – Core Fields tabs on GST Portal.
• In absence of a valid bank account details in GST registration, you will not be able to file GSTR-1 or IFF as the case may, be from August-2024 return period.

(Source: GSTN Advisory dated 23.08.2024)

Introduction of RCM / ITC Statement

• GSTN has introduced on its portal a new statement to report Reverse Charge Mechanism (RCM) transactions i.e., ‘RCM Liability / ITC Statement’.
• This statement will enhance accuracy and transparency for RCM transactions by capturing the RCM liability shown in Table 3.1(d) of GSTR-3B and its corresponding ITC claimed in Table 4A(2) and 4A(3) of GSTR-3B for a return period and also assist taxpayers in correct reporting.
• Such statement will be applicable from tax period August 2024 onwards for monthly filers and from the quarter, July-September-2024 period for quarterly filers.
• The RCM Liability/ITC Statement can be accessed using the navigation: Services >> Ledger >> RCM Liability/ITC Statement.
• RCM ITC opening balance can be reported by following below navigation:
• Login >> Report RCM ITC Opening Balance or Services >> Ledger >> RCM Liability/ITC Statement >> Report RCM ITC Opening Balance
• For opening balance, taxpayers should reconcile the following till tax Period:
  • Monthly filers: Report the opening balance considering RCM ITC till the July-2024 return period.
  • Quarterly filers: Report the opening balance up to Q1 of FY 2024-25, considering RCM ITC till the April-June, 2024 return period.
• Opening balance can be declared till 31.10.2024.
• Taxpayers can rectify any errors committed while declaring the opening balance on or before 30.11.2024, he shall be provided three opportunities for the same.
• This amendment facility shall be discontinued after 30.11.2024.

 (Source: GSTN Advisory dated 23.08.2024)

GSTN Advisory for Reporting Supplies in GSTR 1 and GSTR 5

• GSTN has issued an Advisory on Reporting of supplies to un-registered dealers in GSTR1/GSTR 5 returns.
• Vide Notification No. 12/2024-CT dated 10.07.2024, CBIC had reduced the threshold limit for reporting of invoice wise details of inter-state taxable outward supplies made to unregistered dealers from 5 lakh to 1 lakh to be reported in Table 5 of Form GSTR-1 and Table 6 of GSTR-5.
• Presently, GSTN is in the process of upgrading / development of this function on its portal which may be completed shortly.
• It has been therefore, advised that till the time the functionality is made available on portal, it is advised to continue reporting the invoice wise details of taxable outward supplies to unregistered dealers which are more than 2.5 Lakhs in the Table 5 of Form GSTR-1 and Table 6 of GSTR-5.

(Source: GSTN Advisory dated 03.09.2024)

New Invoice Management System (IMS)

• GSTN is bringing a new Invoice Management System (IMS) on the portal to effectively communicate invoice corrections / amendments by the taxpayers with their suppliers.
• This shall facilitate taxpayer in matching of their records/invoices vis a vis issued by their suppliers for availing the correct Input Tax Credit (ITC) and shall allow the recipient taxpayers to either accept or reject an invoice or to keep it pending in the system, which can be availed later.
• Now, only the accepted invoices by the recipients would become part of their GSTR-2B as their eligible ITC.
• IMS will provide the taxpayers an opportunity to review the genuineness and authenticity of the received invoices. Once the suppliers save any invoice in GSTR 1 / IFF / 1A /the same invoice would be reflected in the IMS dashboard of the recipient.
• On the basis of action taken by the taxpayer, invoices/records can be categorized as follows :
• No action taken: These are the invoices/records where no action has been taken by the recipient these will be treated as deemed accepted at the time of GSTR-2B generation;
• Accepted: There are the accepted records and will be part of GSTR-2B generation;
• Rejected: These records will not be considered for GSTR-2B generation;
• Pending: These records will not be considered for GSTR-2B generation for the month, same will be carried forward in IMS itself for further action in subsequent months.
• No Action records shall be considered as Deemed Accepted and the taxpayer’s intervention will only be required in case a record need to be Rejected or kept Pending.
• The records/invoices saved or filed through IFF by a QRMP taxpayer will flow to IMS for the recipient, and will become part of GSTR-2B, as per action taken by the recipient in IMS on the same.
• All the outward supplies reported in the GSTR 1 / IFF / 1A shall populate in the IMS of recipients for taking the actions such as accept / reject / pending.
• This facility shall be available to the taxpayer from 1^st October, 2024 onwards on the GST portal.
• For details, Advisory may be referred.

 (Source: GSTN Advisory dated 03.09.2024)