Comprehensive Guide to India's GST Invoice Management System

The GSTN is set to introduce the new Invoice Management System (IMS) on October 1, 2024. This system aims to enhance the Input Tax Credit (ITC) calculation and claim process, simplifying numerous taxpayer tasks, reducing compliance errors, and transforming future GST adherence. This article addresses common questions regarding the highly anticipated IMS in GST.

Fundamental Concepts of the Invoice Management System (IMS)

What is the Invoice Management System (IMS)?

The IMS acts as a dashboard feature within the GST portal. It facilitates the organized communication of invoices and credit/debit notes (CDNs) submitted or filed by suppliers. For recipients, it offers a consolidated view to monitor the status of these documents, allowing them to accept, reject, or temporarily hold them for review.

When will IMS become accessible to taxpayers?

The GSTN will launch the IMS on the portal on October 1, 2024. However, taxpayers will be able to perform actions on invoices and CDNs starting October 14, 2024.

Which records will be available for action in IMS?

The IMS dashboard will display the following document types that suppliers have saved or filed via GSTR-1, GSTR-1A, or IFF:

<ul><li>B2B Invoices</li><li>B2B Invoice Amendments</li><li>B2B Debit Notes</li><li>B2B Debit Note Amendments</li><li>B2B Credit Notes</li><li>B2B Credit Note Amendments</li><li>E-commerce operator (ECO) [9(5)] Invoices</li><li>ECO [9(5)] Invoice Amendments</li></ul>

However, invoices and CDNs that are ineligible for ITC due to Place of Supply (POS) rules or Section 16(4) of the CGST Act will not appear on the IMS dashboard. These ineligible records will be directly populated into the 'ITC Not Available' section of GSTR-2B by the portal.

Which documents will bypass IMS but appear in GSTR-2B?

The following documents will not be part of IMS but will directly flow into the recipient's GSTR-2B:

<ul><li>Documents originating from GSTR-5 and GSTR-6 forms</li><li>ICEGATE documents</li><li>Reverse Charge Mechanism (RCM) records</li><li>Documents where ITC is ineligible due to POS rules or Section 16(4) of the CGST Act</li><li>Documents requiring ITC reversal under Rule 37A</li></ul>

Who can access IMS functionality?

The IMS functionality will be available to:

<ul><li>Normal GST-registered taxpayers</li><li>SEZ units/SEZ developers</li><li>GST-registered casual taxpayers</li></ul>

What information will taxpayers see on the IMS?

Taxpayers will have two distinct viewing options within IMS:

<ul><li>**Inward Supplies:** This is the recipient's perspective, where all options for acting on records are available.</li><li>**Outward Supplies:** This is the supplier's perspective, allowing suppliers to track the actions taken on their saved or filed records.</li></ul>

Which invoices have been viewable on the IMS dashboard since October 14, 2024?

IMS was launched on October 1, 2024, but document uploads were permitted from October 14, 2024. Consequently, all invoices and records for the GSTR-2B period from October 2024 onwards are accessible on the dashboard. Users cannot access records or invoices for any GSTR-2B period prior to October 2024.

When will the first GSTR-2B based on IMS actions be generated?

The IMS will automatically generate the initial draft of GSTR-2B for users on November 14, 2024. This generation will be based on all actions taken by a user from October 14, 2024, pertaining to the October 2024 GSTR-2B period.

Can a taxpayer take action after November 14, 2024, and regenerate the GSTR-2B for the October 2024 return period?

Yes, taxpayers can amend or take other actions on invoices/records for the October 2024 GSTR-2B return period after November 14, 2024. They can also recompute their GSTR-2B on the portal. This is permissible until the taxpayer files their GSTR-3B for the October 2024 return period.

Is it mandatory to act on IMS? What happens if no action is taken?

If users do not act on records in the IMS within a GST return period, the GST portal will consider them 'deemed accepted' for auto-generating GSTR-2B. Therefore, acting on records/invoices in the IMS is not mandatory. However, failing to act means that any inappropriate invoices will also be deemed accepted, potentially leading to incorrect tax liability and compliance issues.

The IMS Workflow

How can I access IMS?

To access IMS:

<ul><li>[Log in to the GST portal](/glossary/navigating-official-gst-portal-comprehensive-guide-online-access-india).</li><li>Navigate via: GST portal Dashboard > Services > Returns > Invoice Management System (IMS) Dashboard.</li></ul>

What happens to accepted and rejected records?

<ul><li>**Accepted:** An invoice accepted in IMS becomes part of GSTR-2B. The portal will automatically populate GSTR-2B and GSTR-3B with tax-paid details from the accepted invoice for ITC claims.</li><li>**Rejected:** A rejected invoice in IMS will not be included in GSTR-2B, and GSTR-3B will not be auto-populated with its details.</li></ul>

IMS will display rejected invoices on the supplier's interface, allowing the supplier to amend them via GSTR-1 (if not yet filed) or GSTR-1A.

Once GSTR-3B is filed for a specific period, all accepted/rejected records related to that period (excluding records with PENDING status until the Section 16(4) CGST Act limit) will be removed from IMS.

When will invoices and documents appear in IMS?

Invoices will appear on the IMS dashboard once suppliers save their documents in their respective GSTR-1, GSTR-1A, or IFF.

When can the recipient taxpayer act on a record?

Recipient taxpayers can act on an invoice or record as soon as it appears on their IMS dashboard.

What happens to IMS documents when the recipient files GSTR-3B?

The system will remove all accepted/rejected records pertaining to a particular GSTR-2B from the IMS once the GSTR-3B for that period is filed.

What happens to documents kept pending in IMS?

Pending records will remain visible in the IMS until the timeline specified by Section 16(4) of the CGST Act, 2017. After this cut-off date, the system will remove them, as they will no longer be eligible for ITC.

What is the draft GSTR-2B?

Under the IMS facility, the system-generated GSTR-2B is considered a draft GSTR-2B. It is generated on the 14th of each month and includes accepted, deemed accepted, and rejected records. However, rejected records are view-only and cannot flow into GSTR-3B.

Which documents are considered for GSTR-2B generation?

The system considers all accepted, rejected, and 'No Action' records for GSTR-2B generation:

<ul><li>Accepted records appear in the 'ITC Available' section of GSTR-2B.</li><li>Rejected records appear in the 'ITC Rejected' section of GSTR-2B.</li><li>'No action' records are treated as 'Deemed accepted' and also appear in GSTR-2B.</li></ul>

Can actions be taken after the generation of draft GSTR-2B?

Yes, the IMS facility allows recipients to take action even after the draft GSTR-2B is generated on the 14th of each month. This option is available until the filing date of GSTR-3B or its due date. However, the user must recompute GSTR-2B for actions taken after the 14th and file the updated version in GSTR-3B. The GSTR-3B due date is the 20th of every month.

Is there any situation where draft GSTR-2B will not be generated on the 14th of the subsequent month?

Yes, the system will not generate a draft GSTR-2B by the 14th of a month if the user failed to file their GSTR-3B in the preceding period. Once GSTR-3B is filed, taxpayers can generate their GSTR-2B from the IMS dashboard.

How many times can GSTR-2B be regenerated?

There are no restrictions on regeneration as long as GSTR-3B has not been filed by its due date.

What about GSTR-2B for quarterly taxpayers?

For QRMP scheme taxpayers, GSTR-2B will not be generated for the first (M1) and second (M2) months of a quarter. Instead, the system will generate a combined GSTR-2B for the entire quarter (M1, M2, and M3) on the 14th of the Q+1 month. For example, for the first quarter of a financial year, GSTR-2B will be generated on July 14th.

QRMP taxpayers can recompute GSTR-2B after the 14th of the Q+1 month until the filing of the corresponding GSTR-3B, similar to the logic for monthly GSTR-2B/3B.

What will happen to GSTR-2A?

The IMS facility will not impact the generation of GSTR-2A; it will continue as before.

Is it mandatory to recompute GSTR-2B?

If a taxpayer takes action or changes records on the IMS dashboard after the draft GSTR-2B is generated (on the 14th of each month for normal filers and the 14th of Q+1 for QRMP taxpayers), it is mandatory to recompute GSTR-2B.

Actions Available in the IMS

What actions can be taken in IMS?

By default, all records on the IMS dashboard have a