IMS for QRMP Taxpayers: A Complete Guide
Change is coming to the claiming of the Input Tax Credit (ITC) and business processes with the introduction of the Invoice Management System (IMS) with its automation features. For QRMP (Quarterly Return Monthly Payment) taxpayers, this means no longer relying on GSTR-2B and her purchase invoice verification processes.
With real-time validation of invoices, automatic compliance checks, and tight control on usable ITC, QRMP taxpayers will experience a paradigm shift in working capital management, cash flow, and technology reliant business process compliance. In this article, we break down what’s changing, how it affects you, and what steps you can take to stay ahead.
ITC Claiming steps for QRMP Taxpayers in QRMP
Given below the ITC payment using IMS is intuitive and easy for taxpayer QRMP with family aid. Steps include… Â
Step 1: Supplier uploads invoices via IFF or GSTR – 1
You first have to ensure that your client uploads his/her sales invoices through IFF or GSTR 1 so that you can see the purchase invoices and your IMS can pick it. The deadline for GSTR1 is the 11th month. Â
Step 2: Buyer views invoices on the IMS dashboard Â
In case clients forget to carry out these steps, the invoices reflect automatically on the portal. Post upload the invoices become visible to all the parties thus giving clients access to them all the time.
Step 3: Verify invoices and choose an action
Review the invoices highlighted on the provided IMS portal and check if those invoices relate to your accounts. You may take one of the following three actions with respect to each of them:
- Accept – This is correct and the invoice is eligible for ITC.
- Reject – This is incorrect; the invoice contains some mistakes or does not belong to you, meaning it cannot be ITC eligible.
- Pending — Further explanation is required on your part, or you are waiting for the goods or services to be provided. In the absence of any activity on these invoices that have been marked pending, they will be rolled over to the subsequent quarter.
With Pending status on an invoice, you get a grace period for review so that you do not unintentionally claim an ineligible ITC. If no action is undertaken by the 14th of the month following the quarter, the invoice is accepted by default.
Step 5: GSTR-2B Generation and ITC Auto Computation
GSTR-2B is created on the 14th month post-Quarter End Date, listing all accepted and automatically accepted invoices as well as auto-populated ITC. Any changes made in the IMS portal after the 14th of the month following the quarter end will require you to recompute GSTR-2B to revise and adjust your ITC calculations.
Step 6: ITC Claiming
Claiming the ITC from your GSTR-2B, you can secure it within your quarterly GSTR-3B return.
Effects of IMS on GSTR-2A and GSTR-2B for QRMP filers
The upcoming changes are outlined in the table below on how the new features will transform the experience for QRMP taxpayers focusing on invoice accessibility, deadline responsiveness, and ITC calculation.
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Month | Supplier uploads invoices via | Appears in IMS dashboard | GSTR-2B generation | Action required by | ITC Computation in GSTR-3B |
M1 (1st Month) | IFF or GSTR-1 | Immediately after upload | NA | Anytime | NA |
M2 (2nd Month) | IFF or GSTR-1 | Immediately after upload | NA | Anytime | NA |
M3 (3rd Month) | IFF or GSTR-1 | Immediately after upload | By the 14th of the month following M3 | 14th of the month after the end of the quarter | Yes |
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These are the key changes QRMP taxpayers will encounter when shifting their GSTR-2B reconciliation process to IMS for ITC claims:
Key changes for QRMP taxpayers
GSTR-2B is generated only once every quarter. For example, for April–June quarter, it will be available by 14th July. Currently, even for QRMP taxpayers, GSTR-2B is generated every month.
- Although QRMP taxpayers see GSTR-2B quarterly, they can view invoices uploaded by their suppliers through the IMS dashboard in real-time.
- Real-time visibility of invoices is available on the IMS dashboard. GSTR-2B might be quarterly, but suppliers are able to upload invoices and QRMP taxpayers can see them instantly.
- During the return period, buyers can take action anytime. Invoices are markable as Accept, Reject, or Pending up until GSTR-2B is generated. These choices determine whether ITC is available.
- Actions after GSTR-2B are still possible. Buyers are permitted to take or change steps after GSTR-2B until they complete filing GSTR-3B. In such situations, GSTR-3B must be altered to account for changes in ITC (Input Tax Credit) eligibility.
IMS is much more than a compliance solution. It represents a new paradigm of interaction for QRMP taxpayers with their purchase data. Businesses no longer need to match the purchase invoices to the auto-generated GSTR-2B to claim ITC, as the new system takes care of this. The system will also eliminate the need to record reversal entries on the books later.
