Invoice management system
Understanding the Invoice Management System (IMS) Under GST
In this post, we will discuss the Invoice Management System (IMS) under GST, a powerful tool designed to simplify invoicing and ensure seamless compliance. Let’s explore its key features, benefits, and how it works:
- What is the Invoice Management System (IMS) Under GST?
- Key Features of Invoice Management System (IMS)
- How does the Invoice Management System Work?
- Invoice Management System (IMS) Dashboard
- How to use IMS on the GST Portal?
- How Taxpayers Manage Invoices and Claim Input Tax Credit
- Benefits of Invoice Management System
- Key Points of the New Invoice Management System (IMS)
- FAQs
What is the Invoice Management System (IMS) Under GST?
IMS under GST is a technology designed to ease invoicing management. It helps businesses to generate, organize, and maintain invoices efficiently under the GST system. Instead of handling difficult tracking and filing, IMS streamlines the process, providing easy compliance.
A one-stop solution for creating, storing, and tracking invoices, saving time and energy.
Key Features of Invoice Management System (IMS)
- Seamless Communication
The IMS links suppliers and recipients, enabling invoice documentation and communication via a unified dashboard. - Centralized Management of GSTR-2B
Recipient taxpayers can view all supplier-submitted invoices in one location. The system generates GSTR-2B automatically, requiring recipients to perform only a few steps, such as ACCEPT, REJECT, or PENDING, to complete their ITC reporting. - No Extra Compliance Effort
Taxpayers do not have to worry about additional compliance requirements. If no action is made on an invoice, it is considered accepted automatically, simplifying ITC reporting. - Summarized Dashboard View
The IMS dashboard provides a clear summary of all inward invoices and the actions taken, making it easier for businesses to make decisions and perform audits. - Easier Invoice Amendments
Suppliers can instantly change saved invoices using the GSTR-1A process, increasing flexibility and accuracy.
This functionality aims to make invoice handling easier and decrease the effort of both suppliers and recipients.
How does the Invoice Management System Work?
A significant challenge in GST compliance is obtaining an Input Tax Credit (ITC). The IMS functionality tries to make this procedure easier. Here’s how it works:
- Invoice Submission by Supplier: Suppliers save and submit invoices via GSTR-1, IFF, or amend them using GSTR-1A before filing GSTR-3B.
- Recipient Dashboard: Submitted invoices appear in the recipient’s IMS dashboard, including information such as the GSTIN, trade name, and invoice number.
- Actions for Recipients: Recipients can ACCEPT, REJECT, or mark invoices as PENDING before filing their GSTR-3B (by the 20th).
- ACCEPT: Adds the invoice to GSTR-2B, generated on the 14th.
- REJECT: Excludes the invoice from GSTR-2B.
- PENDING: Defers the invoice to a future GSTR-2B.
- Deemed Acceptance: If no action is taken, the invoice is automatically entered into GSTR-2B.
- Amendments: Supplier amendments in GSTR-1A update the invoice in the recipient’s IMS and reflect it in GSTR-2B the following month.
Pending invoices can be claimed in future months, subject to the time limits specified in Section 16(4) of the CGST Act, 2017.
Invoice Management System (IMS) Dashboard
The Invoice Management System dashboard appears as follows:
How to use IMS on the GST Portal?
- Login to the GST Portal
Go to Services > Returns > Invoice Management System (IMS).
Click the “View” button on the relevant tiles to access the recipient dashboard (inward supplies) and supplier dashboard (outward supplies).
- View Invoice Summary
Buyers can view all purchase invoices reported by GST-registered suppliers in their GSTR-1/GSTR-1A or IFF on the IMS dashboard.
Invoices are categorized under headings like B2B invoices, Section 9(5) invoices, and credit/debit notes (original and amended), with records marked as ‘No action,’ ‘Accepted,’ ‘Rejected,’ or ‘Pending.’
Click on any headings to view the list of invoices, and then choose one of the actions listed below.
- Take Action on Invoices
Choose A (Accept), R (Reject), or P (Pending) to take action. If no option is selected, no action is recorded. Click ‘Save’ to confirm your actions.
Use filters or search to find specific invoices and download records with their status as an Excel file.
4. Choose to keep invoices pending? Inform!
Select ‘P’ to mark invoices/CDNs as pending for later action. Ensure you accept or reject them before the CGST Section 16(4) deadline to claim input tax credit. Delays can block your working capital!
5. Generate/Recompute GSTR-2B
You can access GSTR-2B after the 14th of each month for the previous month. If no action is taken in IMS by then, it becomes the final GSTR-2B for claiming ITC in GSTR-3B. If you make changes later, use the ‘Compute GSTR-2B’ button to update it.
- File GSTR-3B
After completing actions on the IMS, details will flow into GSTR-2B. Accepted invoices/debit notes will appear under ‘ITC Available’ in GSTR-2B and populate Table 4 of GSTR-3B. Review, correct discrepancies, and file GSTR-3B.
How Taxpayers Manage Invoices and Claim Input Tax Credit
Managing inward invoices and claiming ITC requires taxpayers to follow many steps:
- Collect Purchase Records: Collect all information from the purchase register.
- Download GSTR-2A: Details of inward invoices displayed here once suppliers file GSTR-1.
- Download GSTR-2B: On the 14th of each month, you can get your auto-generated ITC statement.
- Reconcile GSTR-2A & Purchase Register: Match the GSTR-2A entries to the purchase records.
- Verify GSTR-1 & Sales Register: Ensure that outside supplies are accurate.
- Match GSTR-3B & GSTR-1: Calculate the GST liability.
- Compare GSTR-2B & GSTR-3B: Use ITC correctly while discharging GST liability.
- Reconcile E-Way Bills & Invoices: Avoid inconsistencies in large businesses.
These steps simplify ITC claims and guarantee compliance.
Benefits of Invoice Management System
The new Invoice Management System (IMS) provides many benefits to businesses:
- Accurate Audits:Auditors can quickly review invoices, reducing errors.
- Fewer GSTR-3B Mistakes:A summary view ensures no invoices are missed during the filing process.
- Simpler Pending Invoice Handling: Pending invoices pass over without affecting GSTR-2B or GSTR-3B.
- QRMP Support: IMS supports small businesses, but generates GSTR-2B quarterly for QRMP taxpayers.
Key Points of the New Invoice Management System (IMS)
- Launched online on October 1, 2024.
- Simplifies the assessment of inward invoices and automates actions.
- There is no additional compliance burden; invoices are ‘deemed accepted’ if no action is taken.
- Improves audit efficiency for big companies while simplifying ITC claims for small firms.
- The interface is simple to use, and no accounting or auditing experience is required.
We have reached the end of this post. Please leave your questions in the comment area below.
FAQs
1. What are the significant advantages of using an invoice management system?
Ans: The main benefit is automation. An invoicing and payment solution streamlines the invoicing and payment tracking process, saving time, reducing errors, and increasing cash flow.
2. What types of reports can I create using Invoice Management Software?
Ans: Depending on the software you use, you can generate a wide range of reports, including ageing reports, payment status reports, tax reports, and client-specific transaction histories.
3. Is mobile access available in invoice management systems?
Ans: Many invoice management platforms provide mobile access through browsers, allowing you to manage invoices and payments while on the road and keeping you connected to your business at all times.
4. How many times can I regenerate the GSTR-2B?
Ans: There are restrictions once the GSTR-3B is not filed by the due date.
