Taxpayers can update the action taken on the Invoice Management System (IMS) (e.g., changing an invoice from “rejected” to “accepted” or vice versa) and recompute GSTR-2B anytime before filing GSTR-3B
Starting October 2024, the GST Portal introduced the Invoice Management System (IMS), an optional tool designed to streamline the process of verifying invoices and tax credits. This innovative system allows recipients to accept, reject, or keep pending any invoices or records uploaded by suppliers in GSTR-1/1A/IFF. The actions taken on IMS directly influence the recipient’s GSTR-2B report, which is generated on the 14th of the following month.
Here’s how taxpayers can benefit from and navigate IMS effectively to ensure accurate tax filings.
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Key Functions of the Invoice Management System
The IMS allows taxpayers to take specific actions on invoices:
- Accept: Confirms the invoice and includes it in GSTR-2B, which reflects the eligible input tax credit (ITC).
- Reject: Excludes the invoice from ITC eligibility in GSTR-2B.
- Pending: Marks the invoice for further verification.
Once an invoice is accepted, rejected, or pending, the recipient’s GSTR-2B will auto-populate these statuses. Furthermore, the GSTR-3B form on the GST Portal will reflect the ITC and tax liabilities as per GSTR-2B, although taxpayers have the flexibility to edit these auto-populated fields before finalizing and filing GSTR-3B.
Correcting Errors in the Initial Phase of IMS Implementation
During the initial rollout of Invoice Management System, taxpayers might inadvertently make mistakes when marking actions on invoices. Such errors can impact:
- ITC Availability: Incorrect rejection or acceptance in IMS can alter the accurate reflection of ITC in GSTR-2B.
- Liability Auto-population: Mistakes in IMS may lead to inaccurate liability data for both the recipient in GSTR-3B and the supplier.
If such mistakes are identified, taxpayers can update the action taken on the Invoice Management System (IMS) (e.g., changing an invoice from “rejected” to “accepted” or vice versa) and recompute GSTR-2B anytime before filing GSTR-3B. This ensures that GSTR-3B accurately reflects the correct ITC and tax liabilities.
Recommended Actions for Taxpayers Using IMS
In cases where errors in IMS actions lead to incorrect ITC or liability figures in GSTR-3B, taxpayers are advised to:
- Review Auto-populated Data: Before filing GSTR-3B, carefully review the ITC and liability details auto-populated from GSTR-2B.
- Edit as Needed: If discrepancies are found due to IMS actions, edit GSTR-3B entries manually to ensure correct ITC availing or accurate tax liability based on actual records.
- Verify with Documentation: Always cross-check ITC and liabilities with available records to avoid discrepancies.
By following these steps and leveraging the flexibility of Invoice Management System (IMS), taxpayers can reduce filing errors and ensure their GSTR-3B accurately represents their tax obligations and eligible input tax credit.
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