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The Goods and Services Tax Network is constantly streamlining its GST portal and introducing new features to simplify compliance and auditing for taxpayers. The latest is the Invoice Management System (IMS), which went live on 14th October 2024. It aims to help significantly manage the process of ITC claims.
This article discusses the key features and benefits of the Invoice Management System and explains how it works. Stay with us.
Latest Updates
14th October 2024
As per the latest GSTN advisory, IMS is made available on the GST portal since 14th October 2024. The first GSTR-2B with IMS actions would be the one generated for October 2024 that is generated on or after 14th November 2024.
9th September 2024
In the 54th GST Council Meeting, the Finance Minister acknowledged the enhancements to the existing GST return architecture. As stated in the advisory issued on 3rd September, the recipient taxpayers, for the purpose of availing Input Tax Credit (ITC), will be provided options to either accept, reject, or keep the invoice pending. Though, as of the moment, the facility stands optional, this process is expected to reduce errors, improve reconciliation, and reduce notices issued on account of ITC mismatch in the returns.**The same would be given effect through the relevant circulars/ notifications.
The Invoice Management System, or IMS, is a new feature within the GST portal in the late 2024 to allow recipient taxpayers accept, reject, or keep invoices pending when saved or filed by their supplier taxpayers. Mismatches between invoices filed by suppliers and returns submitted by recipients are a significant issue taxpayers face when claiming input tax credits.
Once rolled out, the IMS will allow registered recipients to match their records with invoices issued by suppliers in their GSTR-1. This will streamline recipient taxpayers' Input Tax Credit (ITC) availing process.
The new IMS feature was implemented within the GST portal from 14th October 2024.
Watch the video to under the complete workflow of IMS:
One of the significant problems that taxpayers face in GST compliance is availing input tax credit (ITC). The IMS functionality is expected to resolve some of the critical bottlenecks in that process.
The new system has not yet been rolled out, but as per the advisory issued by GSTN , the Invoice Management System dashboard looks like -
As a buyer or vendor, you can find the IMS functionality on the GST portal after logging into it using your credentials.
Step 1: Login to the GST portal
Login to the GST portal. Go to Services > Returns > click on ‘Invoice Management System (IMS)’.
Access both supplier dashboard (outward supplies) and recipient dashboard (inward supplies) by clicking on the ‘View’ button on the respective tiles.
Step 2: View summary of invoices on the IMS Dashboard
As a buyer, you can view all the purchase/inward supplies invoices reported by your GST-registered suppliers through their GSTR-1/ GSTR-1A or IFF on the IMS dashboard.
All invoices will be classified into headings such as B2B invoices, CGST Section 9(5) invoices by the e-commerce operator, credit notes and debit notes, both original and amended. It will show the number of records/documents against each such heading based on your actions- ‘No action’, ‘Accepted’, ‘Rejected’, and ‘Pending’. Below is a glimpse of the same-
Click on any one of the headings to view the list of invoices to take one of the actions as shown below.
Step 3: Time to take actions
Select one of the buttons to take action - A (Accept), R (Reject) or P (Keep it Pending). If you do not mark any button, then it will be considered as no action taken. Click on the ‘Save’ button to save your actions.
Choose the relevant filters or search option to look for any particular invoice while you can also download the records with their status in the form of Excel sheet.
Use the checkboxes against the records to make multiple selection or take bulk actions.
Note: Beware! No action up until the filing of GSTR-3B leads to deemed acceptance of invoices.
Step 4: Do you choose to keep invoices waiting? Then Inform.
You must take action by selecting ‘P’ to keep any particular invoices/CDN as pending for later review and action. You can skip a few months, but make sure to take accept or reject the invoice/CDN on or before the deadline to claim input tax credit defined under the CGST Section 16(4). Note that the more you delay, your working capital continues to be blocked!
Step 5: Generate GSTR-2B/ Recompute GSTR-2B
Usually, you can access GSTR-2B after 14th of every month for the previous month. If you (buyer) do not take action in IMS after the 14th of the month, then it will be the final GSTR-2B for claiming ITC in your GSTR-3B.
However, if you change or take any action after 14th of the month for the previous month, then the system enables the ‘Compute GSTR-2B’ button to recompute GSTR-2B.
Step 6: File GSTR-3B
After all the necessary actions on the IMS, GSTR-2B will have the details flowing into it based on those IMS actions. Accepted invoices/debit notes will fall under the ‘ITC Available’ section of GSTR-2B. Details from here will flow in the respective sections of Table 4 of the GSTR-3B. Review the same, edit for any discrepancies you may find and then proceed to file GSTR-3B.
For detailed guide, visit our exclusive article for all the steps- ‘Step-by-step guide to use IMS’.
Currently, taxpayers need to follow multiple steps to manage inward invoices, reconcile them, and claim ITC based on reconciled invoices. These steps are:
Large businesses also require reconciling e-way bills and invoices to avoid discrepancies and future compliance issues.
When rolled out, IMS is expected to offer multiple benefits to small and large businesses.
Also Read-
FAQs on Invoice Management System (IMS) in GST
Invoice Management System (IMS) Process Flow