On October 1, 2024, the introduction of the Invoice Management System (IMS) revised the process of claiming the Goods and Services Tax (GST) Input Tax Credit (ITC) in GSTR-3B returns. Earlier based on the GSTR-2B without detailed reconciliation, the assessee could claim ITC.
With the IMS a Two-step Reconciliation Process is Obligatory
* Reconciling Books with GSTR-2B:
Match the ITC recorded in your books with the ITC shown in the GSTR-2B.
* How to Reconcile Using GST IMS Data
Align the ITC from the first reconciliation with the available information on the GST IMS (Invoice Management System) dashboard.
Claiming GST Input Tax Credit (ITC) Through IMS
To claim the ITC comply with these steps-
1. Navigate to the Services (Returns) tab: Log in to the GST portal and go to the Services (Returns) tab.
2. Approve Invoices That Meet the Requirements: Mark invoices that satisfy the requirements of Section 16 of the CGST Act as eligible for ITC.
3. Show Ineligible Invoices: Mark invoices that do not fulfill the eligibility criteria as Pending. Prevent rejecting them since the same could be directed to the ITC loss.
4. Calculate GSTR-2B: Leverage the GSTR-2B computation feature on the invoice management system (IMS) dashboard to seamlessly transfer invoice data into the GSTR-3B tax return.
5. Submit GSTR-3B Filing: Navigate to the Return Dashboard, choose the filing period, and input the required figures.
Follow the said method for filing GSTR-3B.
Things to Learn
* Prevent rejecting invoices: Maintain ineligible invoices marked as pending to keep the potential for further ITC claims.
* Proceed with Care: Accept the invoices carefully. Claiming the GST ITC on the ineligible invoice can direct the penalties and interest.
* Timely Action: Resolve the discrepancies and missing invoices.
*Talk to Suppliers: To inform suppliers about missing invoices use the feature of “Communicate with Taxpayer”
*Maximize IMS Benefits: Use the IMS to facilitate the reconciliation process and reduce errors.
IMS proposes advantages while it adds complexity to the ITC claiming process. The IMS through enforcing the stricter reconciliation regulations has the motive to lessen the tax evasion and ensure that merely the eligible ITC is being claimed by the businesses.