Starting 1st October 2024, managing Input Tax Credit (ITC) under GST is getting easier with the new Invoice Management System (IMS). Here’s a breakdown of how the system works and how it can benefit your business:
How IMS Works:
Suppliers upload invoices through GSTR-1 or the Invoice Furnishing Facility (IFF). They can amend these invoices via GSTR-1/GSTR-1A before filing GSTR-3B for that tax period. Once an invoice is uploaded, it appears on the recipient’s IMS dashboard and later in their GSTR-2B.
2. Invoice Details on IMS Dashboard:
The recipient’s dashboard shows key information like the supplier’s GSTIN, trade name, invoice number, and other relevant particulars related to uploaded invoices.
Action by Recipients
- ACCEPT: The invoice will be included in GSTR-2B, and ITC will be auto-populated in GSTR-3B.
- REJECT: The invoice will not appear in GSTR-2B, and ITC cannot be claimed.
- PENDING: The invoice won’t be included in GSTR-2B for that month, but it will be carried forward to subsequent months (subject to the time limit in Section 16(4) of the CGST Act, 2017).
4. Deadlines for Action:
Recipients should act on invoices before the 14th of each month to generate an accurate draft GSTR-2B. If action is taken after the 14th, they will need to recompute GSTR-2B.
5. Auto-Acceptance:
If the recipient fails to act, the invoice will be DEEMED ACCEPTED and included in GSTR-2B automatically.
Amendments and Updates:
6. Supplier Amendments:
If the supplier amends an invoice (ACCEPTED, REJECTED, or PENDING) before filing GSTR-1, the updated invoice will replace the old one, requiring the recipient to act on the amended invoice.
7. Impact of GSTR-1A Amendments:
When the supplier makes changes via GSTR-1A, the updated information flows through IMS to the recipient’s GSTR-2B. However, ITC for such changes can only be claimed in the next month.
Additional Notes:
8. Credit Notes:
If a credit note is rejected by the recipient, it increases the supplier’s liability in the subsequent month’s GSTR-3B.
9. GSTR-2B Generation:
GSTR-2B for any month can only be generated after the previous month’s GSTR-3B is filed.
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Disclaimer :
The information contained herein is a summary form and is prepared based on the provisions of GST Law and related Rules, Circulars and Notifications therein. While the information is believed to be accurate to the best of our knowledge, we do not make any representations or warranties, express or implied, as to the accuracy or completeness of this information. Readers should conduct and rely upon their own examination and analysis and are advised to seek their own professional advice. We accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies upon it.
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