The Goods and Services Tax Network keeps introducing new features to simplify compliance under e-Invoicing. The Invoice Management System is one such feature that has been introduced recently. It aims to help significantly simplify how taxpayers manage invoices.

Let us take a look the key features of the Invoice Management System and know how it works.

What is the Invoice Management System (IMS) Under GST?

The Invoice Management System is a new feature within the GST portal to allow recipient taxpayers accept, reject, or keep invoices pending when filed by their supplier taxpayers. When claiming input tax credits, the mismatch between invoices filed by supplier and returns submitted by recipient is a major issue. The IMS will allow registered recipients to match invoices issued by suppliers with their records in their GSTR-1. This will help make Input Tax Credit (ITC) availing process smoother for recipient taxpayers’.

How Does the Invoice Management System Work?

A problem that taxpayers often face is availing input tax credit (ITC). IMS is expected to resolve some of the issues in that process.

• First, suppliers submit their GSTR-1 by the 11th of every month or amend the submitted invoice in the GST portal. GSTR-1A can be submitted until a taxpayer files the GST return for the relevant period.
• Once the supplier submits the recorded invoice, it will appear in the IMS dashboard and eventually in the GSTR-2B of the recipient.
• The recipient will be given options: ACCEPT, REJECT, or PENDING, which must be acted upon by the 20th of the corresponding months.
• If the recipient chooses to ACCEPT, the invoice becomes part of the recipient’s GSTR-2B
• If the recipient decides to REJECT an invoice, it does not become part of their ITC report or GSTR-2B.
• When an invoice is kept PENDING, it will be carried forward to next month.
• If a recipient does not take action. In that case, the einvoice is considered ‘deemed accepted’ and automatically added to the GSTR-2B.
• If an invoice is accepted or pending invoice is amended the recipient must act on the updated invoice.
• When suppliers make amendments through a GSTR-1A, the updated information is applied to the recipient’s GSTR-2 B in the subsequent month.
• The PENDING invoices can be availed of in any future months subject to a maximum limit.

Benefits of Invoice Management System

IMS offers multiple benefits to taxpayers.

Precision audit: IMS allows auditors to check each invoice without the need to access multiple interfaces. This helps avoid audit errors.

Minimal error: IMS offers a summary view of all inward invoices. This minimizes the risk of missing out on any invoice before filing GSTR-3B.

Less complication: Pending invoices are automatically carried forward to the next month without affecting GSTR-2B and 3B.

Conclusion:

Getting an input tax credit is a primary challenge that taxpayers face. IMS helps eliminate the main obstacles in the process. It further simplifies compliance under e-Invoicing by helping taxpayers manage invoices.