If you are in the business and claiming ITC under GST is a headache for you, there is a good news for you all. CBIC has launched a new ITC claim system – Invoice Management System (IMS).
The GST portal has introduced new Invoice Management System (IMS) to enhance how you as a taxpayer, can manage and validate invoices for claiming Input Tax Credit (ITC). It will start from October 2024, this system will allow you as a taxpayer to accept, reject, or keep invoices pending that your suppliers upload. Only invoices that will be accepted by you, will count toward eligible ITC in the taxpayer’s GSTR-2B.
Key Features of Invoice Management System (IMS)
- Visibility and Control: The system provides you as a taxpayer or a recipient with a dashboard showing all invoices uploaded by your suppliers. You can easily take action on each invoice to ensure that only accurate and genuine invoices make it to your GSTR-2B, where ITC is calculated.
- Deemed Acceptance: If you do not take action on an invoice before filing their GSTR-3B, it will automatically be deemed as accepted, and the ITC will be calculated accordingly.
- Invoice Amendments: If a supplier amends an invoice before filing their GSTR-1, the amendment will automatically reflect in your or the recipient’s IMS dashboard. The recipient can then take action on the amended invoice.
- Pending Invoices: If you mark the Invoices as “pending”, you can act upon them in subsequent months. But, remember, you have to address them before the deadlines defined under Section 16(4) of the CGST Act.
Actions Available for Taxpayers
- Accept: The accepted invoice will count as part of the taxpayer’s eligible ITC in GSTR-2B.
- Reject: Rejected invoices won’t appear in GSTR-2B or affect the ITC calculation.
- Pending: Pending invoices won’t affect the ITC for the current month but can be revisited later.
Key Deadlines and Requirements
- GSTR-2B Generation: whatever invoices you accept or deemed accept, will be part of GSTR-2B, generated on the 14th of each month.
- QRMP Scheme: For taxpayers under the Quarterly Return Monthly Payment (QRMP) scheme, GSTR-2B will only be generated quarterly.
Benefits
The GST authority has designed the new Invoice Management System (IMS) to simplify ITC claims by giving taxpayers more control over their invoices. It helps reduce the risk of discrepancies, and in turn, improves tax compliance without adding new reporting burdens. This will help you run your business smoothly.
Example of How IMS Works
- Supplier Uploads Invoice: When your supplier uploads an invoice in GSTR-1, it appears in the recipient’s IMS dashboard.
- Recipient Takes Action: The recipient or you can either accept the invoice, reject it, or mark it as pending.
- GSTR-2B Update: You are free to exclude or include the invoices from the ITC calculation in GSTR-2B.
- Finalization in GSTR-3B: Once you file GSTR-3B, you finalize the actions, and the ITC will appear in your GSTR-3B return and the electronic credit ledger accordingly.
IMS also provides screenshots of the dashboard where taxpayers can view and manage the invoices. A sample IMS dashboard might display a list of invoices, with options to “Accept,” “Reject,” or “Pending.”
Below is a screenshot of IMS dashboard showing summary of all inwards records and action taken thereon:
This system streamlines invoice management, ensuring taxpayers claim ITC only on genuine invoices while offering flexibility to handle discrepancies. For further details, refer to the official GST portal.
