[Opinion] Invoice Management System | A Paradigm Shift in GST Compliances

Surjeet Singh Negi – [2024] 166 taxmann.com 423 (Article)

1. Introducing the Invoice Management System (IMS)

In its ongoing efforts to streamline tax processes and enhance transparency, the Goods and Services Tax Network (GSTN) is set to introduce a new functionality called the “Invoice Management System (IMS). This system, effective from 01st October 2024, aims to revolutionize how businesses handle invoices and claim Input Tax Credit (ITC) under the Goods and Services Tax (GST) regime.

2. What is IMS?

The Invoice Management System is a digital platform designed to enable taxpayers to efficiently manage invoice-related activities such as corrections, amendments, and validations directly through the GST portal. This new functionality will facilitate better communication between taxpayers and their suppliers, offering a structured way to match and verify invoices before they form part of the ITC claims. From October 2024 onwards, taxpayers will be able to accept, reject, or keep invoices pending through this system, ensuring better accuracy in their records and smoother reconciliation with supplier data.

3. How IMS Works

Once a supplier submits invoices through GSTR-1, IFF, or GSTR-1A, these invoices will automatically reflect in the recipient’s IMS dashboard. The recipient will then have the option to: –

1. Accept: The invoice, making it eligible for ITC in their GSTR-2B.
2. Reject: The invoice, excluding it from the ITC calculations.
3. Keep it Pending for further review or future action.

These actions can be taken any time before the recipient taxpayer files their GSTR-3B for the corresponding period. If no action is taken, the invoice will be deemed accepted and considered in the ITC available for that period.

Importantly, any amendments made by the supplier before filing GSTR-1 will automatically update in the recipient’s IMS dashboard.

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