Introduction of Invoice Management System (IMS)

Background

 

As you may be aware, multiple advisories have been issued over the past months regarding IMS. Below is a summary of the advisories for your quick reference:

 

·       1 October 2024: The IMS facility was introduced on the GST portal, asking recipients to take actions (accept/reject/pending) on invoices reported by suppliers in GSTR-1/IFF/GSTR-1A. Accordingly, GSTR-2B would be computed.

 

·       12 November 2024: An advisory was issued clarifying that IMS is an optional facility and also allowing recipients to amend their actions on IMS (e.g., from rejected to accepted) and recompute GSTR-2B at any time before filing GSTR-3B.

 

·       13 November 2024: While recipients can amend actions until filing of GSTR-3B, a new 'Supplier View' feature was introduced allowing suppliers to track status of their invoices and view action taken by recipient.

 

Key Clarifications

 

Below are key clarifications in current advisory issued by GSTIN on handling of inadvertently rejected records

 

·       What if a recipient wrongly rejected a record (invoice, debit notes, or ECO) in IMS and has already filed GSTR-3B?

• The recipient may request the supplier to re-report the same record (without changes). Consequently, the supplier can take the following actions:

-        If GSTR-3B is not filed – via GSTR-1A

-        If GSTR-3B is filed - via amendment in GSTR-1/IFF in any subsequent periods (within specified time limit)

 

• Once the recipient accepts the re-reported record in IMS, the ITC can be claimed in the month the invoice appears in GSTR-2B.

 

·       Will the supplier’s tax liability increase if they re-report a rejected record?

No, if the supplier re-reports the same record (without any changes) in GSTR-1A in the same month or in the amendment table of a subsequent GSTR-1/IFF, the system treats it as the same transaction. Therefore, there is no additional tax liability.

 

·       What if a recipient wrongly rejected a credit note in IMS and has already filed GSTR-3B?

• The recipient may request the supplier to re-report the credit note (without changes). Consequently, the supplier can take the following actions:

-        If GSTR-3B is not filed – via GSTR-1A

-        If GSTR-3B is filed - via amendment in GSTR-1/IFF in any subsequent periods (within specified time limit)

 

• Once the recipient accepts the re-reported credit note in IMS, the ITC will be reduced by the full value of the credit note, and ITC can be reversed in the month the credit note appears in GSTR-2B.

 

·       Will the supplier’s liability change due to a rejected credit note?

 

Initially, the supplier’s liability increases due to rejection of the credit note by the recipient. However, once the supplier re-reports the same credit note in GSTR-1A or in the amendment table of a subsequent GSTR-1/IFF, the liability is reduced accordingly. Thus, the net impact on the supplier’s liability is neutral. 

  Comments

 

The advisory provides clarity on the corrective mechanism available to both recipients and suppliers in case of inadvertent rejections on IMS. It reinforces the importance of timely communication and coordination between recipients and suppliers to ensure accurate reporting, ITC availment and corrections, if any.