All About Invoice Furnishing Facility (IFF)

Invoice Furnishing Facility (IFF) allows small taxpayers to upload their invoices every month. The Central Board of Indirect Taxes & Customs (CBIC) had notified the Invoice Furnishing Facility on 10.11.2020 via notification number 82 /2020-Central Tax.

Latest Updates
26th August 2021
From 1st September 2021, taxpayers will not be able to file GSTR-1 or use the IFF for August 2021 on the GST portal if they have pending GSTR-3B filings. It applies if GSTR-3B is pending for the past two months till July 2021 (monthly filer) or for the last quarter ending 30th June 2021 (quarterly filer), as per CGST Rule 59(6).

28th May 2021
At the 43rd GST Council meeting, the following was announced:
(1) The time limit to furnish B2B supplies on the IFF (optional facility for the taxpayers opting into the QRMP scheme), for May 2021 has been extended from 13th June to 28th June 2021. 
(2) For any delayed submission of PMT-06 for April 2021 and May 2021, interest relief has been provided as follows:
(i) For April 2021, No interest is charged for delayed submission up to 9th June, whereas 9% of reduced interest is charged between 10th June and 9th July, and 18% of interest is charged thereafter.
(ii) For May 2021, No interest is charged for delayed submission up to 10th July, whereas 9% of reduced interest is charged between 11th and 25th July, and 18% of interest is charged thereafter.
(3) Quarterly GSTR-3B filing for Jan-Mar 2021 has also got interest and late fee relief as laid down here.

1st May 2021
The time limit to furnish B2B supplies on the IFF (optional facility for the taxpayers opting into the QRMP scheme), for April 2021 has been extended from 13th May to 28th May 2021.

What is the Invoice Furnishing Facility? 

The Invoice Furnishing Facility (IFF) is a facility where quarterly GSTR-1 filers can choose to upload their Business-to-business (B2B) invoices every month, currently under the QRMP scheme only. It is governed by Rule 59(2) of the CGST Rules, available to regular taxpayers having an annual aggregate turnover of up to Rs.5 crore. One should keep the following points in mind before utilising the IFF:

• The IFF is an optional facility. Non-usage will not attract any late fee.
• The invoices relating to the last month of a quarter are to be uploaded in the GSTR-1 return only.
• There is no requirement to upload invoices in GSTR-1 if the same has been uploaded in the IFF.
• The total value of invoices that can be uploaded per month is restricted to Rs.50 lakh.
• The details submitted in IFF will be reflected in the GSTR-2A and GSTR-2B of the recipients.
• The Invoice Furnishing Facility will come into effect from 01.01.2021 and the first cut-off date was 13th February 2021 for January 2021 (being the first month for the January-March 2021 quarter).

Who can use the Invoice Furnishing Facility?

Small taxpayers opting into the QRMP scheme filing their GSTR-1 returns every quarter can utilise the Invoice Furnishing Facility. It is important to note that if a taxpayer does not opt to upload invoice details through the IFF, he/she has to upload all the invoice details for the three months of the quarter in the GSTR-1 return.

What is the purpose of the Invoice Furnishing Facility?

The taxpayers whose aggregate turnover is less than Rs.5 crore in the preceding financial year can file their GSTR-1 and GSTR-3B every quarter by opting into the QRMP scheme. This is allowed to reduce the compliance burden on small taxpayers. However, this creates problems for taxpayers who make purchases from QRMP taxpayers in claiming Input Tax Credit (ITC).

For example, when a buyer purchases goods from a QRMP taxpayer during a quarter, the buyer might have to wait until the end of the quarter to claim ITC. The reason for the same is that a small taxpayer can upload the invoices and complete the GSTR-1 filing only after the quarter is completed. This process would cause a delay in claiming ITC as the buyer can claim full ITC only when the invoice appears in his/her GSTR-2B.

Hence, the IFF has been introduced under the QRMP scheme to remove these hardships allowing the QRMP taxpayers to upload selective or all B2B invoices on the GST portal using IFF for the first two months of the quarter. In turn, it helps the buyers in claiming ITC without any delay.

What details are to be submitted in the Invoice Furnishing Facility?

The following details are to be submitted by the small taxpayers if they opt for Invoice Furnishing Facility:

• B2B invoice details of sale transactions (both inter-state and intra-state)– being corresponding tables 4A, 4B, 4C, 6B and 6C of GSTR-1.
   
• Debit and credit notes towards the B2B invoices issued during the month (CDNR)– being corresponding table 9B of GSTR-1.
   
• Respective amendments to the B2B invoices (B2BA) and/or the debit and credit notes (CDNRA)– being corresponding tables 9A and 9C of GSTR-1.
   

It is important to note that the taxpayer should upload all B2C invoices of the quarter while filing quarterly GSTR-1.

How to use the Invoice Furnishing Facility?

As the Invoice Furnishing Facility is optional for the taxpayers under the QRMP scheme, the GST portal gave a timeline to opt-in or out of the scheme, i.e. it was 31st January 2021 for the quarter January-March 2021. Once the small taxpayers stayed in the scheme, the GST portal has provided this facility for the first two months of the quarter only. The B2B invoices should be uploaded in IFF from 1st to the 13th of the month subsequent to the relevant month (being only first two months of the quarter). The QRMP taxpayers can follow the step-by-step guide to use IFF on the GST portal on our article named “Steps to file IFF on GST portal”

ClearTax GST software has smart features to comply under the QRMP scheme easily and faster, as follows:

• One-click import of data into IFF and GSTR-1 from Tally and other softwares after auto-bifurcating B2B documents and the rest
• Enjoy inbuilt validations for filing error-free IFF, with the option to edit on ClearTax
• Upload and file with GST portal easily, either using API or GST portal credentials with DSC or EVC
• Send emails to your clients right after filing with an attached copy of the filed IFF

Check out the Impact of the QRMP and IFF on quarterly GSTR-1 and GSTR-3B filers and how to overcome challenges easily with the help of ClearTax GST.

Advantages of using the Invoice Furnishing Facility  

• Any late upload of B2B invoices, beyond 13th of next month (cut-off date for a month) will never attract late fee unlike GSTR-1. However, the registered buyers may at the most lose the input tax credit for that month as it gets deferred to the next month.
• IFF is optional and flexible. If it was chosen in the first month of a specific quarter, there is no rule that it must be chosen for the second month of the same quarter.
• Buyers of goods from small taxpayers can claim ITC every month.
• The B2B sales details uploaded on IFF will get reflected or auto-populated into the relevant quarterly GSTR-1, thereby removing the need to re-enter the details.
• It pushes for a monthly reconciliation of data and that will ultimately make quarterly return filing easier.
• Small taxpayers can improve their business by providing faster ITC claims.
• Suppose the QRMP taxpayer has only submitted the B2B data on IFF by 13th of next month but forgotten to finish filing IFF for the month by 13th. He will still be allowed to file IFF after 13th, provided the data is already submitted on or before 13th of the next month.
• Eases the compliance burden by reducing the volume of invoices to be uploaded at the end of the quarter.

This is a good move to help both small taxpayers and buyers from small taxpayers. This facility will indirectly help small taxpayers to enhance their business by providing faster ITC claims to their buyers. However, this may increase the compliance costs for them. Further, the data must be segregated as B2B and non-B2B transactions for reporting on the IFF. Once the invoices are uploaded and filed on IFF, it gets auto-populated into the quarterly GSTR-1, making it non-editable or not deletable.

Hence, one has to make a comparison between the benefit of opting for IFF and the cost involved. It is good to opt-in for this facility if the QRMP taxpayer raises comparatively larger volumes of B2B invoices than B2C invoices in a quarter. Further, the impact on business relation with their registered customers must be understood well.