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.
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 invoices every month. A quarterly GSTR-1 filer is a small taxpayer with a turnover of up to Rs.1.5 crore. One should keep the following points in mind before utilising the IFF:
- The IFF can be utilised only for the first two months of a quarter.
- 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 is restricted to Rs.50 lakh per month.
- The details submitted in IFF will be reflected in the GSTR-2A, GSTR-2B, GSTR-4A or GSTR-6A of the recipients as the case may be.
- The Invoice Furnishing Facility will come into effect from 01.01.2021.
2. Who can use the Invoice Furnishing Facility?
Small taxpayers who file their GSTR-1 returns quarterly 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.1.5 crore in the preceding financial year can file their GSTR-1 every quarter. This is allowed to reduce the compliance burden on small taxpayers. However, this creates problems for taxpayers who make purchases from small taxpayers in claiming Input Tax Credit (ITC).
For example, when a buyer purchases goods from a small taxpayer during a quarter, the buyer has 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 caused a delay in claiming ITC as the buyer can claim full ITC only when the invoice appears in his/her GSTR-2A/2B.
Hence, the IFF has been introduced to remove these hardships and help the buyers from small taxpayers in claiming ITC.
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).
- Debit and credit notes of the B2B invoices issued during the month.
5. How to use the Invoice Furnishing Facility?
As the Invoice Furnishing Facility is optional for the quarterly GSTR-1 filers, the GST portal may give a timeline to opt-in for the same. Once the small taxpayers opt for it, the GST portal will provide this facility to these quarterly filers for the first two months of the quarter. The invoices should be uploaded in IFF from 1st to the 13th of the subsequent month.
As of now, the format of IFF has not yet been notified, and we can expect a notification for the format and manner of uploading the invoice data soon. There has also been no clarity yet on whether an offline tool will be provided or not.
6. Advantages of using the Invoice Furnishing Facility
The following are the advantages of Invoice Furnishing Facility:
- Buyers of goods from small taxpayers can claim ITC every month.
- It allows the monthly reconciliation of data and makes return filing easier.
- Small taxpayers can increase their business by providing faster ITC claims.
- 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 will increase compliance costs for them. 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 a small taxpayer raises large volumes of B2B invoices when compared to B2C invoices in a quarter.