GST WEEKLY UPDATE :23/2024-25 (08.09.2024)

1. ITC Invoice Management System: w.e.f. 01.10.2024:

1. To enable taxpayers to efficiently address invoice corrections/amendments with their suppliers through the portal, a new communication process is being brought at portal. This will also facilitate taxpayer in matching of their records/invoices vis a vis issued by their suppliers for availing the correct Input Tax Credit (ITC). GSTN is in the process of developing a new functionality called

Invoice Management System (IMS) which will allow the recipient taxpayers to either accept or reject an invoice or to keep it pending in the system, which can be availed later.

2. This facility shall be available to the taxpayer from 1^st October onwards on the GST portal.

The said functionality would be a major enhancement in the ITC ecosystem of GST. Now, only the accepted invoices by the recipients would become part of their GSTR-2B as their eligible ITC.

Therefore IMS will provide the taxpayers an opportunity to review the genuineness and authenticity of the received invoices. Once the suppliers save any invoice in GSTR 1/IFF / 1A/the same invoice.

wouldbereflectedintheIMSdashboardoftherecipient.Asamplescreenshotofthesameisprovided below.

3. The invoices reflect in the IMS dashboard as shown in the picture above. The recipient can accept or reject an invoice or can simply keep it pending in the system. These actions can be taken from the time of saving the records in GSTR1/IFF/1A by the supplier taxpayer till the recipient taxpayer files his/her corresponding GSTR-3B. If recipient doesn’t take any action on an invoice in IMS then it will be deemed accepted and will move to GSTR-2B as an accepted invoice. In case, the supplier amends the details of a saved invoices in the GSTR-1 before filling the GSTR-1, in such cases the amended invoice will replace the original invoice in IMS, irrespective of the action taken by the recipient on the original invoice.

4. In case supplier has amended any invoice filed in GSTR-1 through GSTR-1A then same will also flow to IMS, however, ITC corresponding to the same will flow in GSTR-2B of the recipient, generated for the subsequent month only. The invoices which would be kept pending can be availed by taxpayers at any future point of time but not later than the limits prescribed by Section 16(4) of the CGST Act, 2017. All the invoices/records reported or saved by the supplier taxpayer in their GSTR-1or IFF or GSTR 1A will be available in the IMS dashboard of the recipient taxpayer for taking the actions. Supplier will also be able to see, what action his recipient has taken on invoices in IMS.
5. Further, at the time of generation of GSTR-2Bonlythe filed invoices/ records by the supplier, will be considered for the computation of ITC. Based on the current cut-off dates and action taken by the recipient, a draft GSTR-2B will be made available to recipient on 14^th of the subsequent month as currently being generated. However, the recipient will be free to take actions of accept/reject or keep pending even after generation of GSTR-2B till the filing of GSTR-3B. If recipient taxpayers have taken an action on any invoice after 14^th of the month, then he would be required to re-compute their GSTR-2B. However, they will not be able to take any action after filing of GSTR-3B for the same month. It may be noted that till GSTR-3B is filed by the taxpayer, GSTR-2B for subsequent month will not be generated.

6. On the basis of action taken by the taxpayer, invoices/records can be categorized as mentioned below :
   1. No action taken: These are the invoices/records where no action has been taken by the recipient these will be treated as deemed accepted at the time of GSTR-2B generation;
   2. Accepted: There are the accepted records and will be part of GSTR-2B generation;
   3. Rejected: These records will not be considered for GSTR-2B generation;
   4. Pending: These records will not be considered for GSTR-2B generation for the month, same will be carried forward in IMS itself for further action in subsequent months.

This functionality is a facilitation for the taxpayers and will not add any compliance burden on the taxpayers as No Action records shall be considered as Deemed Accepted and the taxpayer’s intervention will only be required in case a record need to be Rejected or kept Pending.

QRMP Tax payers:

The records/invoices saved or filed through IFF by a QRMP taxpayer will flow to IMS for the recipient, and will become part of GSTR-2B, as per action taken by the recipient in IMS on the same. The GSTR- 2B of the recipient will be generated monthly, unless the recipient is a QRMP taxpayer. It may be noted that GSTR-2B will not be generated for Month M-1 and M-2 for QRMP taxpayer. GSTR-2B for a QRMP taxpayer will be generated on Quarterly basis only.

Flow of IMS:

All the outward supplies reported in the GSTR 1 / IFF / 1Ashall populate in the IMS of recipients for taking the actions.

1. Accept–Accepted records will become part of ‘ITCAvailable’ section of respective GSTR 2B. GST on accepted records will auto-populate in GSTR 3B as eligible ITC.
2. Reject –Rejected records will become part of ‘ITC Rejected ’section of respective GSTR 2B. ITC of rejected records will not auto-populate in GSTR 3B.
3. Pending–Pending records will not become part of GSTR2B and GSTR3B. Such records will remain on IMS dashboard till the time same is accepted or rejected. ‘Pending’ action shall not be allowed in following scenarios:
   1. Original Credit note
   2. Upward amendment of the credit note irrespective of the action taken by recipient on the original credit note
   3. Downward amendment of the credit-note if original credit note was rejected by recipient, Downward amendment of Invoice/ Debit note where original Invoice/ Debit note was accepted by recipient and respective GSTR 3B has also been filed.

Key points on IMS:

1. Deemed accepted: At the time of GSTR2B generation, are cord will be considered as ‘Deemed Accepted’ if no action is taken on that record in IMS.

2. It is mandatory to recompute GSTR 2B from IMS dashboard in case of any change in action already taken on concerned records or any action is taken after 14^th of the month i.e. date of generation of Draft GSTR-2B.

3. Following supplies will not go to IMS and will be directly populated in the GSTR3B-
   1. Inward RCM supplies where supplier has reported in the Table4 Bof IFF/GSTR1or GSTR 1A and
   2. supplies where ITC is not eligible due to section 16(4) of CGST Act or on account of POS rule.

4. Records will flow to IMS dashboard at the time of saving of record by supplier in respective form and recipient can take action on such record in IMS. However, such records will be populated in the GSTR 2B after filling of return in GSTR-1/IFF/1Aby the supplier.

5. Alltheaccepted/deemedaccepted/rejectedrecordswillmoveoutofIMSdashboardafterfiling of respective GSTR 3B.

6. Pending records will remain on IMS dashboard and these records can be accepted or rejected in future months.

7. It is mandatory to take action on original record and file the respective GSTR3B before taking action on amended record (amended through GSTR-1A/GSTR-1) when original and amended record belongs to 2different GSTR2B return period. If both the records belong to same period’s 2B, only amended record will be considered for ITC calculation of GSTR 2B.

8. Any change made in a record/invoice before filing GSTR-1/1A/IFF by the supplier will reset the record’s status on recipient’s IMS dashboard.

9. GSTR2B will be sequential now. i.e. system will generate GSTR2B of are turn period only if GSTR 3B of previous return period is filed. The liability of supplier will be increased in GSTR 3B for the subsequent tax period, for the invoices/records which have been rejected by the recipient in the IMS for the following transactions
   1. Original Credit note rejected by the recipient
   2. Upward amendment of the credit note rejected by the recipient irrespective of the action taken by recipient on the original credit note
   3. Downward amendment of the credit note rejected by the recipient if original credit note was rejected by him,

Downward amendment of Invoice/ Debit note rejected by the recipient where original Invoice/ Debit note was accepted by him and respective GSTR3B has also been filed.

2. Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Bihar, Delhi, Karnataka and Punjab (Sep 6th, 2024):

This is to inform taxpayers about recent developments concerning the application process for GST registration. It is advised to keep the following key points in mind during the registration process.

1.  Rule 8 of the CGST Rules, 2017 has been amended to provide that an applicant can be identified on the common portal, based on data analysis and risk parameters for Biometric-based Aadhaar Authentication and taking a photograph of the applicant along with the verification of the original copy of the documents uploaded with the application.

2.  The above-said functionality has been developed by GSTN. It has been rolled out in Bihar, Delhi, Karnataka, and Punjab on 6th September 2024.

3.  The said functionality also provides for the document verification and appointment booking process. After the submission of the application in Form GST REG-01, the applicant will receive either of the following links in the e-mail,

(a)  A Link for OTP-based Aadhaar Authentication OR

(b)  A link for booking an appointment with a message to visit a GST Suvidha Kendra (GSK) along with the details of the GSK and jurisdiction, for Biometric-based Aadhaar Authentication and document verification (the intimation e-mail)

4.  If the applicant receives the link for OTP-based Aadhaar Authentication as mentioned in point 3(a), she/he can proceed with the application as per the existing process.

5.  However, if the applicant receives the link as mentioned in point 3(b), she/he will be required to book the appointment to visit the designated GSK, using the link provided in the e-mail.

6.  The feature of booking an appointment to visit a designated GSK is now available for the applicants of Bihar, Delhi, Karnataka and Punjab.

7.  After booking the appointment, the applicant gets the confirmation of appointment through e-mail (the appointment confirmation e-mail), she/he will be able to visit the designated GSK as per the chosen schedule.

8.  At the time of the visit of GSK, the applicant is required to carry the following details/documents

(a)  a copy (hard/soft) of the appointment confirmation e-mail

(b)  the details of jurisdiction as mentioned in the intimation e-mail

(c)  Aadhaar Card and PAN Card (Original Copies)

(d)  the original documents that were uploaded with the application, as communicated by the intimation e-mail.

9.  The biometric authentication and document verification will be done at the GSK, for all the required individuals as per the GST application Form REG-01.

10.  The applicant is required to choose an appointment for the biometric verification during the maximum permissible period for the application as indicated in the intimation e-mail. In such cases, ARNs will be generated once the Biometric-based Aadhaar Authentication process and document verification are completed.

11.  The operation days and hours of GSKs will be as per the guidelines provided by the administration in your respective State.

3. Advisory on Reporting of supplies to un-registered dealers in GSTR1/GSTR 5 (Sep 3rd, 2024):

Vide Notification No. 12/2024 – Central Tax dated 10th July, 2024, the Government has reduced the threshold limit for reporting of invoice wise details of inter-state taxable outward supplies made to unregistered dealers from 2.5 Lakh to 1 Lakh which needs to be reported in Table 5 of Form GSTR-1 and Table 6 of GSTR-5. In accordance with the new legal provisions, this change is currently under development on the portal and would be available to the taxpayers shortly.

Further, till the time the functionality is made available on portal, it is advised to continue reporting the invoice wise details of taxable outward supplies to unregistered dealers which are more than 2.5 Lakhs in the Table 5 of Form GSTR-1 and Table 6 of GSTR-5.

“MICCHAMI DUKKADAM”

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

THANKING YOU.