The Invoice Management System ( IMS ) is recently introduced under GST ( Goods and Services Tax ). It will enable recipient taxpayers to review invoices issued by their suppliers and take actions such as accepting, rejecting, or keeping them pending for future consideration.
The Goods and Services Tax Network ( GSTN ) has issues advisories often related to the same on different dates. Thus, for convenience of our readers, we have put all the advisories to date in one place.
The Invoice Management System (IMS), set to launch on October 1, 2024, introduces a new communication scheme on the GST portal designed to invoice corrections and amendments between taxpayers and their suppliers. This system allows recipient taxpayers to accept, reject, or defer invoices for future action, ensuring that records are precisely aligned with those of their suppliers for accurate Input Tax Credit (ITC) claims.
Get a Copy of The Law of Goods and Services Tax : A Comprehensive Commentary, Click here
By using IMS, taxpayers can manage invoice-related discrepancies through the portal, reducing manual intervention and improving compliance. This process between the recipient’s records and the supplier’s issued invoices is vital for availing accurate ITC, improving transparency and accountability in GST claims.
According to the official advisory, IMS will provide a better solution to address issues surrounding invoice corrections, allowing taxpayers the flexibility to manage and modify their invoice records electronically.
From October 1, 2024, taxpayers will have access to this new facility through the GST portal, enabling them to better handle their invoices and ensure compliance with GST regulations.
Please click here to read the complete advisory on IMS.
A draft manual has been issued to mention the changes introduced by the IMS, which points to improving how taxpayers handle invoices. By enhancing invoice management processes, the government seeks to minimise errors and improve compliance. Taxpayers are encouraged to review the draft manual for detailed instructions, with the finalized version to be released soon.
Get a Copy of The Law of Goods and Services Tax : A Comprehensive Commentary, Click here
The advisory points out that the GST Common Portal’s introduction of IMS will make a huge impact in the GST system. This allows taxpayers to accept, reject, or defer invoices as needed, streamlining the reconciliation process and enhancing compliance accuracy and efficiency.
For a detailed draft manual Please Click Here. Please Note – this is a draft manual and the final version shall be published later.”
The Advisory states as follows:
“With the Introduction of the Invoice Management System (IMS), the taxpayers’ interaction with invoices and business processes will change. This innovative feature empowers taxpayers to seamlessly accept, reject, or keep invoices pending in the system to avail later as and when required, streamlining the reconciliation process, and ensuring greater accuracy and efficiency in GST compliance. Please click here for frequently asked questions (FAQs) on IMS to get a better understanding of the new functionality.”
“Invoice Management System (IMS) is made available to taxpayers from Today, 14th Oct, 2024. The new system shall facilitate taxpayers in matching their records/invoices vis a vis issued by their suppliers for availing the correct Input Tax Credit (ITC). Taxpayers can make use of this system to take action on the invoices reflecting on IMS from 14th Oct, 2024. The first GSTR-2B would be generated for the return period Oct ’24 on 14thNovember, 2024 considering action taken on Invoice Management System. It may be noted that it is not mandatory to take action on invoices in the IMS dashboard for GSTR-2B generation.”
Get a Copy of The Law of Goods and Services Tax : A Comprehensive Commentary, Click here
The Advisory says that :
“Invoice Management System (IMS) is now available to taxpayers. This new system shall facilitate taxpayers in matching their records/invoices vis a vis issued by their suppliers for availing the correct Input Tax Credit (ITC). Taxpayers can now make use of this facility to seamlessly accept, reject, or keep invoices pending in the system to avail later as and when required. The first GSTR-2B on the basis of actions taken in IMS would be generated for the return period Oct ’24 on 14th November, 2024. Please click here for some additional frequently asked questions (FAQs) on IMS to get a better understanding of the new functionality.”
The initial phase of implementing the Invoice Management System (IMS) on the GST Portal, introduced in October 2024, requires taxpayers to exercise caution when taking actions such as accepting, rejecting, or deferring invoices. Mistakes during this process could lead to incorrect Input Tax Credit (ITC) claims or tax liabilities in GSTR-3B. However, taxpayers have the option to amend their actions on the IMS before filing their GSTR-3B, allowing for adjustments and accurate recomputation of GSTR-2B.
According to the advisory, IMS is an optional feature enabling taxpayers to accept, reject, or keep invoices pending for future consideration. These actions, based on supplier-furnished records in GSTR-1/1A/IFF, will determine the recipient’s GSTR-2B, generated on the 14th of the following month. Before taking action on invoices, taxpayers should verify the entries with their accounts, as rejecting an invoice will make its ITC unavailable in GSTR-2B. Liabilities and ITC are auto-populated in GSTR-3B based on data from GSTR-1/1A and GSTR-2B, though taxpayers can modify these details before filing.
In the new functionality, errors may occur during the initial phase of IMS adoption. Mistakes in accepting, rejecting, or deferring invoices may lead to incorrect ITC or liability figures auto-populated in GSTR-3B. To address this, taxpayers can change their actions on the IMS and recompute GSTR-2B until filing GSTR-3B for the relevant period. This flexibility helps ensure accurate ITC and liability calculations.
Get a Copy of The Law of Goods and Services Tax : A Comprehensive Commentary, Click here
In cases where recipients are unable to correct actions on the IMS, resulting in incorrect ITC or liability entries, taxpayers should manually edit these details in GSTR-3B before submission. This ensures correct ITC claims and tax liability payments, based on available records and documents.
The Invoice Management System (IMS) was launched on the GST Portal on October 14, 2024. It allows recipient taxpayers to accept, reject, or defer invoices filed by their suppliers in GSTR-1/1A/IFF. The first GSTR-2B, based on these actions, will be generated on November 14, 2024, for the October 2024 period.
To improve the functionality, a “Supplier View” has been introduced. This feature enables suppliers to see the actions taken by their recipients on invoices reported in GSTR-1/1A/IFF. This helps suppliers identify and address any potential errors made by recipients.
Get a Copy of The Law of Goods and Services Tax : A Comprehensive Commentary, Click here
Certain records, however, are not available for action by the recipient in IMS but can be seen in the Supplier View with a “No Action Taken” status. These include invoices where ITC is not eligible, as per the Place of Supply (POS) rules or Section 16(4) of the CGST Act, and records involving Reverse Charge Mechanism (RCM) supplies.
It is important to note that recipients can change their actions on invoices up until the filing of GSTR-3B. If any changes are made after GSTR-2B generation, recipients must click the “Recompute” button to update their GSTR-2B based on the revised actions.
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