GSTN issues advisory on new Invoice management system

The centre will introduce significant changes in the invoice management system under goods and services tax, allowing taxpayers to keep records of credit and debit records, and add a comment while rejecting any invoice.

The changes effective from October tax cycle, will promote transparency and facilitating smoother transactions in filing records and will able to prevent large number of litigation and notices which arise out of mismatch in GST returns.

The goods and services tax network (GSTN) Tuesday issued an advisory on the changes being implemented in the

invoice management system.

"This is to bring to your notice that several new changes have been introduced in the Invoice
Management System (IMS) to simplify the taxation system and reduce the compliance
burden on the taxpayers," the advisory said.

When rejecting or keeping records pending, taxpayers can add remarks that will be reflected in GSTR-2B and the supplier's dashboard, promoting transparency and facilitating smoother transactions.

The move will help the taxpayers to receive system generated notices sent for supply and invoice mismatch, a main pain point for the businesses.

On Monday, ET reported that the Central Board of Indirect taxes and Customs (CBIC) is working on a new advanced invoice management system which will prevent the system generated notices sent to taxpayers for mismatch in the mismatch in the goods and services tax (GST) returns.

These changes are prospective and will apply only to records filed by suppliers after the rollout.

The changes will be effective by November or December, it indicated.

This development is part of the government's ongoing efforts to refine the GST system.

There are about average 2 lakh system generated annual GST notices, roughly involving about Rs 10 lakh crore in litigation or dispute, which was sent only on account of mismatch in returns.

For compliances under GST laws, there are multiple data points, such as the details of outward supplies submitted in form GSTR 1, details of inward supplies received in form GSTR 2A and 2B, form GSTR 6 for distribution of input tax credit, form GSTR 3B, which is monthly return for payment of taxes, covering all details of supplies, tax payment etc.

In case of any mismatch between disclosures and details in these forms, the tax authorities send a mismatch notice where the taxpayer needs to provide a clear explanation with reconciliations.