A new functionality is introduced by the GST portal to facilitate the user to address the issues regarding invoice corrections/amendments with vendors, which is called the Invoice Management System (IMS), The IMS has been launched on GST portal from 01st Oct 2024 and shall be available to the taxpayers for taking actions on the received invoices/ records from 14th October 2024 onwards.
IMS is launched from GSTR-2B return period of Oct’24. Hence, all the records eligible for GSTR2B of Oct’24 return period onwards will be made available on the IMS dashboard. All the invoices which are part of GSTR 2B of Sep’24 or older return periods will not be reflected in IMS.
The first draft GSTR-2B on the basis of actions taken on invoices/records in the Invoice Management System dashboard would be generated and made available to all the taxpayers on 14th Nov 2024 for the return period Oct’24.
This will be available to all registered taxpayers as normal taxpayers (including SEZ unit/ Developer) and casual taxpayers.
This would have two different views: –
Recipient View: As a recipient, a taxpayer will have an “Inward supply” view to see all the specified documents which are saved or filed by your respective supplier. These documents will be available for actions by the recipient.
Supplier view: As a supplier, a taxpayer will have an “Outward supply” view to see actions taken on all the specified documents by their respective recipient.
*It will be made available shortly.
FACTUAL DETAILS OF IMS
Process Flow and Important Facts
1. Once the supplier Save any invoice in GSTR 1 /IFF /1A, the same would reflect in the IMS dashboard of the recipient.
2. The recipient can either ACCEPT, REJECT or keep such an invoice PENDING. As the IMS functionality is OPTIONAL as of now, the recipient has the option not to take any action and in such case no action taken will be considered as DEEMED ACCEPTANCE.
3. The recipient can take action from the time of saving the records in GSTR 1 / IFF / 1A by the supplier taxpayer till the recipient taxpayer files GSTR-3B.
4. Supplier will be able to see the action taken by the recipient on the invoices saved or reported by him in GSTR 1 / IFF / 1A.
5. In case, the supplier amends the details of a saved invoices in the GSTR-1 before filling the GSTR-1, in such cases the amended invoice will replace the original invoice in IMS, irrespective of the action taken by the recipient on the original invoice.
6. In case the supplier amends any invoice filed in GSTR-1 through GSTR-1A then same will also flow to IMS, however, ITC corresponding to the same will flow in GSTR-2B of the subsequent month only.
7. Where Original and Amended records belong to two different GSTR 2B return period, it is mandatory to take action on original record and file the respective GSTR 3B before taking action on amended record (amended through GSTR 1A/ GSTR 1).
8. Whereas, in case Original and Amended records belong to same GSTR 2B return period, only amended record will be considered for ITC calculation of GSTR 2B.
9. All the accepted/ deemed accepted/ rejected records will move out of IMS dashboard after filing of the respective GSTR 3B.
10. Whereas, pending records will remain on IMS dashboard till the time same is accepted or rejected at any future point of time but not later than the limits prescribed by Section 16(4) of the CGST Act, 2017.
Category of Invoices Basis the Recipient Actions & Effect on GSTR 2B/ 3B
1. No Action Taken and Accepted: No Action Taken and Accepted records will become part of ‘ITC Available’ section of respective GSTR 2B. GST on these records will auto-populate in GSTR 3B as eligible ITC.
2. Rejected: Rejected records will become part of ‘ITC Rejected’ section of respective GSTR 2B. ITC of rejected records will not auto-populate in GSTR 3B.
3. Pending: These records will not become part of GSTR-2B and GSTR 3B.
*Pending’ action shall not be allowed in following scenarios*:
- Original Credit note.
- Upward amendment of the credit notes irrespective of the action taken by recipient on the original credit note.
- Downward amendment of Invoice/ Debit note- where original Invoice/ Debit note was accepted by recipient and respective GSTR 3B has also been filed.
- Downward amendment of the credit-note if original credit note was rejected by recipient.
Liability of supplier will be increased in GSTR 3B for the subsequent tax period on rejection of any of the above four transactions by the recipient in his IMS
Process of GSTR 2B Generation
1. All the invoices/ records reported or saved by supplier in GSTR- 1 or IFF or GSTR-1A will be available in IMS but only filed invoices/ records will be considered for computation of ITC at the time of generation of GSTR 2B.
2. A draft GSTR-2B would be automatically generated on 14th of the subsequent month as being generated currently.
3. However, the recipient taxpayers can take action of accept/ reject/ keep pending even after generation of GSTR-2 till the filing of GSTR-3B of the month.
4. In case recipient has taken an action on any invoices/ record after 14th of the month, then he would be required to recompute GSTR 2B.
5. No action can be taken on any invoice/ record after filing of GSTR 3B for the same month.
6. GSTR 2B will be sequential now i.e., system will generate GSTR 2B of a return period only if GSTR 3B of previous return period is filed.
7. For QRMP taxpayers, GSTR 2B will not be generated for Month-1 and 2 and GSTR 2B for such QRMP taxpayers will be generated on Quarterly basis only.
Transactions not to be reflect in IMS
Following supplies will not go to IMS and will be directly reflect in GSTR 2B and then populated
in the GSTR 3B: –
- Document flow from GSTR 5
- Document flow from GSTR 6
- ICEGATE Documents
- RCM Records
- Document where ITC is ineligible- POS rule or S. 16(4) of CGST Act
- Document where ITC to be reversed on account of Rule 37A
CONSIDERATIONS REQUIRED BY THE TAXPAYERS
- Automated or Manual exercise.
- Impact tax compliances, Accounting and processes.
- Actions within the restricted time period.
- Conscious while taking action.
- Maintain record of invoices/records rejected or pending for actions.
- No scope to claim ITC beyond 16(4).
FEW IMPORTANT FAQs ANSWERED BY DEPARTMENT
1. What happens to the original Tax Invoice/Debit Note if the same record is amended by the supplier?
- If original and amended Tax Invoice/Debit Note belongs to 2 different GSTR 2B return period, then it is mandatory to take action on original Tax Invoice/Debit Note and file the respective GSTR 3B before taking action on amended Tax Invoice/Debit Note (amended through GSTR-1/1A/IFF).
In case if recipient take the action on amended Tax Invoice/Debit Note first then system will not allow to save the action in IMS.
- In case both the original Tax Invoice/Debit Note and amended Tax Invoice/Debit Note belong to same period GSTR-2B, the action taken on amended Tax Invoice/Debit Note will prevail over the action taken on original Tax Invoice/Debit Note.
However, you need to first bring the original invoice/ debit note from pending status to either accept or reject status before taking action of amended invoice/debit note as otherwise system will not allow you to take any action on amended invoice.
2. What happens if the recipient rejects a record?
- If the recipient rejects the record before filling of GSTR 1 by supplier, then the invoice/record can be edited and supplier can file the GSTR 1 with revised detail. This edited record will be made available in the IMS for action by the recipient.
- If the recipient rejects after filling of GSTR 1 by supplier, then the supplier needs to amend/add the invoice/record in GSTR-1A or in subsequent GSTR 1/ IFF with same or revised details, as the case may be. Amended records will be made available in the IMS for action by the recipient.
3. What will happen to GSTR-2A?
GSTR-2A shall continue to be generated as it is.
4. How to take action on records available on IMS dashboard?
- Action on Individual record: To take action on individual record, recipient can select the action by clicking on the radio button available at line-item level and then click on save button to save the action taken.
- Action on multiple records: To take action on multiple records in one go, recipient can select multiple records or all the records through check-box option available on screen. After selecting multiple records, system will enable main action buttons on heading of action radio buttons with count of selected records. Through these action buttons recipient can take action on multiple records in one go.
- Note: On all the multiple selected records, only one type of action can be taken.
5. What will happen if the recipient rejects the Tax Invoice or Debit Note for the supplies of FY 23-24 which was eligible for GSTR 2B of Oct’24, given the deadline to avail the ITC by 30th November?
Taxpayers are advised to reconcile their records before filling of their GSTR 1 for October 2024 tax period for which due date is 11th November 2024.
The Taxpayer can accept/reject the record on IMS after due verification. The ITC for the rejected record will not flow to GSTR 2B for Oct’24.
However, recipient can change the action from rejected to accepted in IMS and recompute GSTR 2B at the time of filing GSTR 3B and take corresponding ITC in the GSTR 3B for Oct’24.
6. Can a supplier amend FCM invoice to RCM invoice and what will the impact on the ITC?
Yes, the supplier can amend an Invoice from FCM to RCM subject to the time limit as per GST law.
The system shall reduce the ITC of the amended FCM Invoice in case the said invoice was accepted by the recipient.
Further, the RCM invoice shall flow to GSTR 2B of the recipient.
7. Can the place of supply be changed by the supplier in the GSTR 1 and what will be the impact on the ITC?
Yes, place of supply can be changed by the supplier in the GSTR 1 subject to the time limit given in the GST law.
Further if the ITC becomes ineligible due to change in place of supply, then recipient should reverse the ITC in the Table 4B1.
8. When should an invoice/debit note be rejected?
Rejection of an invoice/debit note should be done very carefully as rejection will result in no ITC for the recipient. A record may be rejected if it does not pertain to the recipient, or the detail of the record is erroneous to such an extent that CN and DN cannot handle the situation.
9. How can recipient accept a genuine credit note issued by supplier in IMS as it will result further reduction of the recipient ITC, however recipient had reversed ITC corresponding to invoice itself because of 17(5), Rule 42, 38, 43 etc., or not availed the ITC at all because of POS or 16(4) etc., ineligibility?
In such cases the recipient can accept the said credit note in IMS. As the recipient had already reversed the ITC, there is no need for reversal of ITC again in case of such credit note.
10. What action shall be available on upward amended invoice/debit notes, where the upward amended invoice/debit notes is Saved by supplier and the same is not filed?
The recipient will not be able to take an action on an upward amended invoice/debit notes, if the said amended record has only been saved by supplier in GSTR-1/GSTR-1A/IFF but the same record has not been filed. The recipient will be able to take action once the supplier files such a record.
11. What to do in case wrong invoice is corrected by issuance of Credit Note by the supplier instead of amending the same and such Credit note has been rejected by the recipient?
In the absence of linkage of Credit Note with the corresponding invoices, the system cannot understand whether original invoice for this Credit Note was accepted or rejected. Therefore, if the invoice is not correct, then it is advisable to rectify the mistake through amendment of invoices in the GSTR-1 instead of issuance of a Credit Note.
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