Invoice Management System (IMS) Goes Live from 14th October 2024

 The long-awaited Invoice Management System (IMS) is now live on the GST portal, offering taxpayers a more streamlined way to handle invoices and manage their Input Tax Credit (ITC) effectively. Launched on 14th October 2024, IMS is designed to help taxpayers align their invoices with those issued by suppliers, ensuring they claim the correct ITC.

Key Highlights of the New IMS

With the new IMS in place, taxpayers can now take action on the invoices reflecting on the portal from 14th October 2024 onwards. The system gives recipients the ability to accept, reject, or keep invoices pending, with any action or inaction influencing their GSTR-2B report. The first GSTR-2B report reflecting these changes will be generated for October 2024 and made available on 14th November 2024.

It’s important to note that while the system facilitates better invoice management, it is not mandatory for taxpayers to take immediate action for GSTR-2B generation. However, any accepted invoices will automatically be added to their eligible ITC for that period.

New Features from the 54th GST Council Meeting

During the recent 54th GST Council Meeting, three new features were introduced to enhance the GST return filing process:

  1. Reverse Charge Mechanism (RCM) Ledger
  2. Input Tax Credit Reclaim Ledger
  3. Invoice Management System (IMS)

Taxpayers will also have the option to declare opening balances for these ledgers, ensuring a smooth transition and alignment with the new system.

Managing Invoices from the IMS Dashboard

The new IMS Dashboard makes it easy for taxpayers to manage their invoices. If no action is taken on an invoice, it is automatically deemed accepted and added to the GSTR-2B report. The dashboard also allows taxpayers to review the authenticity of received invoices, ensuring the invoices they accept are genuine.

Invoices saved by suppliers in GSTR-1, IFF, or 1A will reflect in the recipient's IMS Dashboard. Invoices can be acted upon until the recipient files their GSTR-3B return. If a supplier amends an invoice in GSTR-1 before filing, the amendment will replace the original invoice in the IMS, regardless of any previous action taken by the recipient.

Handling Invoice Amendments and ITC Impact

If a supplier amends an invoice before filing GSTR-1, the changes will reflect in the IMS dashboard, and the updated invoice will replace the original. However, any Input Tax Credit (ITC) related to the amended invoice will only reflect in the GSTR-2B of the subsequent month.

Taxpayers can keep invoices pending for future months, provided they take action before the limits specified under Section 16(4) of the CGST Act, 2017.

Actions on Invoices: GSTR-2B and GSTR-3B

At the time of generating GSTR-2B, only invoices that have been filed by the supplier will be considered for ITC calculation. Taxpayers can continue to take action on invoices (accept/reject/pending) until they file their GSTR-3B. Once the GSTR-3B is filed, no further changes can be made to the invoices for that period.

If actions are taken after the 14th of the month, taxpayers will need to recompute their GSTR-2B. This flexibility is particularly beneficial, as it ensures taxpayers have ample time to review invoices and adjust their ITC claims.



IMS Workflow and QRMP Impact

For QRMP taxpayers, invoices saved or filed through IFF will be integrated into the recipient’s IMS Dashboard, affecting their GSTR-2B on a quarterly basis. Unlike regular taxpayers, QRMP taxpayers will not have GSTR-2B generated for the first two months of the quarter; instead, it will be generated only at the end of the quarter.

Important Considerations for IMS Users

  • No Action Taken: Invoices with no action taken will be treated as deemed accepted during GSTR-2B generation.
  • Accepted Invoices: These will automatically become part of the ITC Available section in GSTR-2B.
  • Rejected Invoices: These will not contribute to GSTR-2B, and ITC will not be auto-populated in GSTR-3B.
  • Pending Invoices: Pending invoices will not be considered in GSTR-2B or GSTR-3B until action is taken.

Additionally, certain supplies, like Inward RCM Supplies reported in specific tables of IFF/GSTR-1, will bypass the IMS system and populate directly in the GSTR-3B.

Conclusion

The introduction of the Invoice Management System (IMS) marks a significant step in simplifying invoice management and ensuring accurate ITC claims for taxpayers. By giving taxpayers the power to control the invoices that contribute to their GSTR-2B and GSTR-3B, IMS ensures greater transparency and accountability within the GST ecosystem.

For more updates on how to effectively manage your invoices under IMS, reach out to Power of Factorial Business Solutions today.

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