FAQs on the Invoice Management System (IMS) under GST

The Invoice Management System (IMS) is a cornerstone in the GST framework, aimed at simplifying and enhancing the compliance process. This guide answers the most common questions about IMS, exploring how it supports businesses in maintaining accurate and efficient GST filings.

Basics of the Invoice Management System (IMS)

What is IMS?

The Invoice Management System (IMS) is a new functionality within the GST portal that provides a streamlined approach to handling invoices and Credit/Debit Notes (CDNs). Through the IMS, taxpayers can access a dashboard to track their invoices and take actions such as acceptance, rejection, or marking them as pending. This feature facilitates seamless interaction between suppliers and recipients, helping recipients validate the status of their invoices.

When will IMS be available?

The IMS dashboard will go live on October 1, 2024. From October 14, 2024, taxpayers can begin taking actions on their invoices and CDNs.

Note: Invoices of October month will be visible in IMS. For September 2024, the filing process will be the same as earlier.

What types of documents will IMS display?

The IMS dashboard will display the following records from suppliers’ filings:

B2B Invoices, including amendments
B2B Debit Notes and Credit Notes, with amendments
Eco [9(5)] Invoices and amendments
However, certain documents that do not qualify for ITC due to Place of Supply (POS) rules or CGST Section 16(4) will be excluded from the IMS and shown in the ‘ITC Not Available’ section of GSTR-2B instead.

Is there any turnover limit to access IMS?

There is no turnover limit for IMS. IMS will be applicable to all registered taxpayers.

Access and Use of IMS

Who can access IMS?

IMS will be available to GST-registered taxpayers, SEZ units, SEZ developers, and casual taxpayers. Access is granted directly through the GST portal by following:
Dashboard > Services > Returns > Invoice Management System (IMS) Dashboard

What actions can be taken within IMS?

IMS offers three main actions for invoices and CDNs:

Accept: Marks the invoice as ready for ITC in GSTR-2B.
Reject: Removes the invoice from ITC eligibility in GSTR-3B.
Pending: Defers action on the invoice for a future date.

Note: If no action is taken on the invoices, then it will be deemed accepted.

What if an invoice is amended after an action has been taken?

If a supplier amends an invoice post-action but prior to filing GSTR-1, the amended invoice will override the previous record in IMS, prompting a fresh action. This ensures the recipient always has the latest invoice information before taking any further steps.

Impact of Actions on GSTR-2B and GSTR-3B

What happens to accepted and rejected invoices?

Accepted invoices become part of GSTR-2B and automatically populate GSTR-3B with the ITC details, while rejected invoices do not flow to GSTR-3B. Rejected invoices are also flagged in the supplier’s IMS dashboard for potential amendments.

Will IMS affect GSTR-2A?

IMS functionality will not affect GSTR-2A. GSTR-2A generation will continue as usual, with GSTR-2B serving as the draft reconciliation document that reflects accepted, deemed accepted, and rejected invoices.

What happens to invoices kept as ‘Pending’?

Invoices marked as ‘Pending’ remain visible in IMS until the statutory timeline under CGST Section 16(4) expires. After this point, any pending records will automatically be ineligible for ITC and removed from IMS.

Additional FAQs on IMS and Tax Compliance

When can taxpayers take action on invoices?

Taxpayers can act on an invoice as soon as it appears in IMS. IMS will also allow them to revise actions on records up until They file their GSTR 3B.

How does IMS work for quarterly taxpayers?

For those under the QRMP scheme, GSTR-2B will not generate monthly. Instead, a combined GSTR-2B for the entire quarter will be available on the 14th of the month following the end of the quarter. Actions taken within IMS will be reflected in this quarterly document, streamlining the process for quarterly taxpayers.

Can suppliers modify the invoice type, and what is the impact on ITC?

Yes, suppliers can convert an FCM (Forward Charge Mechanism) invoice to an RCM (Reverse Charge Mechanism) invoice within the stipulated time limit. Any ITC claimed on the original FCM invoice will need to be reversed as per the change to RCM, and the RCM invoice will directly populate the recipient’s GSTR-2B.

Which invoices are visible on IMS dashboard since 14th Oct 2024?

IMS is launched from GSTR-2B return period of Oct’24. Hence, all the records eligible for GSTR2B of Oct’24 return period onwards will be made available on the IMS dashboard. All the invoices which are part of GSTR2B of Sep’24 or older return periods will not be reflecting in IMS.

Which is the first GSTR2B prepared using actions taken on IMS?

The first draft GSTR-2B on the basis of actions taken on invoices/records in the Invoice Management System dashboard would be generated and made available to all the taxpayers on 14th Nov 2024 for the return period Oct’24.

Can taxpayer take action after 14th Nov,2024 and regenerate GSTR-2B of Oct’24 return period?

Taxpayer can take action on the invoices/records in their IMS dashboard and recompute their GSTR-2B of Oct 24’ return period even after 14th November 2024 till the time the taxpayer files his GSTR-3B.

Is it mandatory to act on IMS? What happens if no action is taken?

It is not mandatory to act on records in IMS dashboard for GSTR2B generation. The records where no action is taken by the recipient would be treated as accepted by the system and a GSTR-2B would be generated as it is generated presently.

When should an invoice/debit note be rejected?

Rejection of an invoice/debit note should be done very carefully as rejection will result in no ITC for the recipient.
A record may be rejected if it does not pertain to the recipient, or the detail of the record is erroneous to such an extent that CN and DN cannot handle the situation.

In light of the time limit to avail ITC being till 30th November for FY 2023-24 or furnishing of annual return whichever is earlier, how can the ITC of erroneously rejected invoice in IMS, be taken by the recipient in the FY 2023-24?

In case the recipient taxpayer erroneously rejects an invoice in IMS, then the same invoice can be accepted in IMS again before filing of GSTR-3B.
After accepting the said invoice, the recipient taxpayer should recompute the updated GSTR-2B for availing the credit in GSTR 3B for the FY 2023-24.

How can recipient accept a genuine credit note issued by supplier in IMS as it will result further reduction of the recipient ITC, however recipient had reversed ITC corresponding to invoice itself because of 17(5), Rule 42, 38, 43 etc., or not availed the ITC at all because of POS or 16(4) etc., ineligibility?

In such cases recipient can accept the said credit note in IMS. As recipient had already reversed the ITC, there is no need for reversal of ITC again in case of such credit note.

What action shall be available on upward amended invoice/debit notes, where the upward amended invoice/debit notes is Saved by supplier and the same is not filed?

The recipient will not be able to take an action on an upward amended invoice/debit notes, if the said amended record has only been saved by supplier in GSTR-1/GSTR-1A/IFF but the same record has not been filed.
The recipient will be able to take action once the supplier files such a record.

What to do in case wrong invoice is corrected by issuance of Credit Notes by the supplier instead of amending the same and such Credit note has been rejected by the recipient?

In the absence of linkage of Credit Note with the corresponding invoices, system cannot understand whether original invoice for this Credit Note was accepted or rejected.
Therefore, if the invoice is not correct, then it is advisable to rectify the mistake through amendment of invoices in the GSTR 1 instead of issuance of a Credit Note.

Can the Credit Note be kept as pending in IMS? If no, then why?

Credit Note cannot be kept pending in the IMS by the recipient as the supplier has reduced its outward tax liability at the time of issuance of credit note.
IMS does not change the existing flow where the documents/records reported by the supplier in the GSTR 1 is accepted and corresponding impact is reflected in the GSTR 2B. Now because of IMS, an additional option has been provided to recipient to reject the credit note if it does not belong to him.

Whether liability can be added in the same GSTR 3B in case where credit note has been rejected by the recipient before filing of GSTR 3B by the supplier?

No, if a credit note is rejected by the recipient, the liability of the supplier is increased on the portal to that extent in the GSTR 3B of subsequent tax period and not in the GSTR 3B of same tax period.

Conclusion

The introduction of the Invoice Management System (IMS) marks a significant step forward in simplifying GST compliance in India. By allowing taxpayers to take actions on invoices in real-time and integrating with GSTR-2B and GSTR-3B filings, IMS minimizes errors and facilitates efficient ITC claims. As the GST landscape continues to evolve, IMS promises to reduce the compliance burden on taxpayers and ensure a smoother, more transparent invoicing process. Taxpayers are encouraged to familiarize themselves with the functionalities of IMS to leverage its benefits fully and ensure seamless compliance.

With IMS in IRIS GST Software, you can:

Fetch your IMS Dashboard invoices into IRIS GST Software as often as needed.
Reconcile IMS invoices with your Purchase Register to determine the appropriate actions.
Bulk action invoices based on reconciliation results using custom filters and categories.
Get a clear view of your reconciliation status with a comprehensive comparative summary.
Refresh your GSTR-2B with every change you make in IMS.
Repeat these steps as many times as needed before filing GSTR-3B.
Easily communicate any concerns with suppliers regarding IMS invoices via email.
Download IMS reconciliation results for further review.
Prefer to handle actions externally? No problem – upload a CSV with your actions for each IMS invoice, and you’re all set to submit to GST.

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