Faster ITC claim: Now suppliers can see and take action on whether buyer rejected the invoice or accepted it on the new IMS portal of GST

Faster ITC claim: Now suppliers can see & take action on whether buyer rejected the invoice or accepted it on the new IMS portal of GST

The Goods and Services Tax Network (GSTN) has introduced a new feature where suppliers can see whether the buyer has accepted or rejected the invoice saved by the supplier on the GST portal. This feature is implemented inside the newly introduced Invoice Management System (IMS) on the GST portal from October 14, 2024. GST registered sellers or suppliers should note that since the introduction of IMS portal, GST registered buyers can accept or reject (or take no action) against invoices saved by sellers on the GST portal.

Accepting the invoice saved by sellers on the GST portal will enable the buyers (recipients) to claim input tax credit and at the same time help the seller file a correct GST return. Only when the invoice is accepted then the seller's GST return can be filed in accordance with the law and the correct amount of output tax liability can be calculated.

"To further facilitate the taxpayers, the Supplier View of IMS has also been made available where the action taken by their recipients on the records/invoices reported in GSTR-1/1A/IFF, will be visible to the suppliers in 'Supplier View' functionality. This will help a supplier taxpayer to see the action taken on their reported outwards supplies and will help to avoid any wrong action taken by the recipient taxpayer," said GSTN in an advisory dated November 13, 2024.

New GSTN feature to correct mistakes in GST invoice matching process for claiming input tax credit; Know how it works

How the new supplier view feature of invoice management system (IMS) may help buyers in claiming input tax credit faster

Back in the old days when a supplier or seller made any error in the invoice and filed a GST return based on this wrong invoice it caused issues with the buyer namely in regard to claiming input tax credit and other issues. This is because the invoice has to reflect the true and correct view of the transaction between the buyer and seller otherwise the GST return cannot be filed without errors.

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"In this situation the error could only be solved by filing an amended GST return either in the next month or next to next month depending upon when the error was caught. This months' time or more depending upon when the error in invoice was detected was a time lag during which period the buyer could not have claimed his input tax credit for this particular wrong invoice. However now with the introduction of this new feature (supplier view) on the IMS system, a supplier can know the error in real time if the buyer detects it and rejects the invoice on the IMS portal. This will help in faster rectification of errors in invoice and hence the invoice can now be accepted faster by the buyer resulting in the buyer claiming ITC faster," says Chartered Accountant Bimal Jain, founder, A2Z Taxcorp LLP.

The first GSTR 2B on the basis of buyer's action on the IMS will be generated on November 14, 2024

According to the advisory by GSTN, "Invoice Management System (IMS) has been made available on the GST Portal from 14th October 2024 wherein the recipient taxpayer can accept, reject or keep the invoices pending which are saved/filed by their suppliers in their respective GSTR-1/1A/IFF. This is to further inform you that the first GSTR-2B on the basis of such actions taken in IMS by the recipient taxpayers will be generated on 14th November 2024 for October-2024 period."

Chartered Accountant Aniket Kulkarni says, "The recipient taxpayer (buyer) would be rejecting the invoices, where supply has either been not received by them or where Input tax credit is not available to the recipient. If a supplier has made mistakes while uploading the invoice details, it can be pointed out to him online itself. Moreover this advisory by GSTN has advantages for suppliers or sellers as well. Since the mistakes can be pointed out the supplier can make necessary amendments in GSTR 1 and so correct the invoice details and thereby comply with the law."

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These invoices are not available in IMS for taking any kind of action by the buyer

GSTN said: "The below mentioned records/invoices are not available in IMS for taking any kind of actions by the recipient but are visible in supplier view with the status as 'No Action Taken':

Documents where ITC is not eligible either due to POS rule or Section 16(4) of the CGST Act,
Records attracting RCM Supplies."

"Further, this is to be reiterated again that any action taken on records can be changed by the recipient taxpayer till the filing of GSTR-3B of the return period. In case the taxpayer changes any action after the generation of GSTR-2B, they need to click the GSTR-2B recompute button to recompute their GSTR-2B based on the new actions taken," sain GSTN on the advisory.

This story originally appeared on: India Times - Author:Faqs of Insurances