What is the Invoice Management System in the GST portal?

The Invoice Management System (IMS) is a new feature in the GST portal designed to help businesses handle invoice corrections between you and your sellers. This will be available for taxpayers in the ITC from the 1st of October 2024.

The biggest challenges that many buyers and sellers face is the lack of communication between them when they try to claim their ITC. This new IMS in GST aims to reduce the gap and simplify the communication to help them match their records and correct any discrepancies.

If you are a recipient business, the IMS lets you review and manage the invoices sent by your suppliers. You can accept, reject, or leave the invoice pending to take an action in the future. In this way, you can claim your Input Tax Credit (ITC) accurately. Besides these facilities, the IMS keeps your action visible to your suppliers.

Whenever your supplier saves the invoices in GSTR 1/IFF/1A, they are populated in your IMS dashboard for you to verify the authenticity and accuracy to make this a part of your GSTR-2B.

The invoices sent by your suppliers can also be left idle in the IMS, from the time they were sent to you to the time you file your next GSTR-3B. The invoices that are not attended to are considered accepted and get added to your GSTR-2B. If your seller makes changes to the invoices they already sent you, the older ones will get replaced with the new modified invoices whether you take an action or not.

If your supplier has made changes to any invoices in the GSTR-1 through GSTR-1A, then the same will flow to your IMS dashboard but the Input Tax Credit will be reflected in your GSTR-2B only in the next month. Invoices left pending from your side can be attended to within the time mentioned in the Section 16(4) of the CGST Act, 2017.

When you generate your GSTR-2B, only the invoices your supplier sent you will be considered for ITC. Based on what actions you take on the invoices and the cut-off dates for you, the GSTR-2B draft showing your ITC claim will be available to you on the 14th of the next month.

Once your GSTR-2B is created, you can proceed to accept, reject, or keep your invoices. However, if you make any modifications to the invoices after the 14th, you'll need to update your GSTR-2B. Once you’ve filed your GSTR-3B for that month, you will not be allowed to make any changes to your GSTR-2B for the same month. The GSTR-3B for the next month won't be created until your current GSTR-2B is filed.

Based on the action you take on the invoices sent to you, the records will be categorized as follows.

• No action: These will be considered accepted invoices and will be added to your GSTR-2B.
• Accepted: These will be considered accepted and will be added to your GSTR-2B.
• Rejected: These will not be added to your GSTR-2B.
• Pending: These will not be considered for the current month but will be moved to the next months in the IMS portal.

Pending invoices 

As stated, pending invoices will not be a part of GSTR-2B or GSTR-3B until those are accepted within the given time frame. GSTN states a few scenarios as examples where you cannot leave records pending:

• In the case when it is an original credit note.

• As a recipient, if you rejected the original credit note from your supplier, you can't leave any reductions to that credit note pending.

• In scenarios where you accepted the original debit note and have already filed your GSTR-3B, IMS does not allow you to make any downward amendments to that debit note.

What happens in the case of a QRMP tax payer?  

Your seller will file the invoices or records through the Invoice Furnishing Facility (IFF) which will connect to your IMS dashboard and become a part of your GSTR-2b based on the action you take in the IMS. GSTR-2B is generated monthly for you, but for QRMP taxpayers, GSTR-2B is not generated for the first two months of the quarter (M1 and M2). Instead, their GSTR-2B is generated only once, at the end of the quarter.

A word from us 

At Zoho Books, we get that managing invoices and claiming Input Tax Credit (ITC) can be complicated for businesses. However, the IMS introduced by the GSTN will make the the process more transparent and efficient. The option to review, accept, or reject invoices helps businesses like you ensure accuracy in your GST returns, while the clear workflows for QRMP taxpayers further streamline compliance. We’re here to help you stay informed and ensure your business remains tax-ready and compliant with all the regulations without any added complexity.