1. 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 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).
2. 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.
3. 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.
4. 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.
5. 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
Checkout 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.
6. Advantages of using the Invoice Furnishing FacilityThe following are the advantages of 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.