Invoice Furnishing Facility (IFF) Under GST

Purpose And Applicability of Invoice Furnishing Facility

Invoice Furnishing Facility is a facility through which small taxpayers who file quarterly returns can upload their invoices on the GST portal every month. This facility can be viewed as an extension of the GSTR-1 as it works on similar lines. The IFF will enable businesses to claim GST credit in time and seamlessly. The facility will go live on 01 January 2021.

How Does Invoice Furnishing Facility Work?

• A small taxpayer filing quarterly returns will have the option to use the Invoice Furnishing Facility for each of the first and second months of the quarter, wherein, the small taxpayer can furnish the details of the outward supplies (not exceeding the value of INR 50 lakhs) in each month, between the 1st and 13th day of the following month.
• Through the IFF, the taxpayer can declare B2B sales (inter-state and intra-state) along with the details of debit and credit notes issued during the month.
• The taxpayer can upload all invoices for the month in the IFF or choose to upload invoices only for particular customers who wish to claim credit of GST paid monthly.
• The details uploaded in the IFF will appear in the Form GSTR-2A/GSTR-2B/GSTR-4A/GSTR-6A of the receipt in the same month and the remaining invoices uploaded in the quarterly Form GSTR-1 will appear in the Form GSTR-2A/GSTR-2B/ GSTR-4A/GSTR-6A of the concerned receipt at the end of the quarter.

Example: A taxpayer, who has opted to use the IFF has the option to declare 2 out of 5 invoices issued in April in the month of April itself (as the customer of those 2 invoices desires to avail ITC in the same month). The details of these 2 invoices can be furnished using the IFF, and the remaining 3 invoices can be furnished in the Form GSTR-1 of the April to June Quarter. The 2 invoices furnished using the IFF will appear in the GSTR-2B of the said customer in April, and the remaining 3 invoices will appear in the GSTR-2B of the respective customers in June.

Note: The taxpayer has to upload the 2 invoices between 01 May and 13 May.

What Details Are to Be Furnished in the Invoice Furnishing Facility?

When using the IFF, businesses need to provide specific details of their supplies, including the recipient's GSTIN (Goods and Services Tax Identification Number), the invoice number, date of the invoice, and the value of the supply. This information allows the recipient to view and claim the ITC promptly, aligning with their tax compliance process.

If small taxpayers choose the Invoice Furnishing Facility, they must provide the following information:

• Tables 4A, 4B, 4C, 6B, and 6C of GSTR-1 correspond to B2B invoice information of sale transactions (including interstate and intrastate).
• Debit and credit notes for B2B invoices sent out during the month (CDNR), which match to table 9B of the GSTR-1.
• Amendments to the related tables 9A and 9C of GSTR-1, which correspond to the B2B invoices (B2BA) and/or the debit and credit notes (CDNRA).

It is significant to remember that while completing the quarterly GSTR-1, the taxpayer must upload each B2C invoice from the quarter.

It's important to note that the IFF is a provisional facility and the details furnished here must be reported again in the regular GSTR-1 return for the respective tax period. This process ensures that the details provided are accurate and consistent across the reporting framework.

What Are The Benefits Of Invoice Furnishing Facility (IFF)?

For Small Taxpayers

• Increased business from larger taxpayers who usually shun small taxpayers (as they file quarterly returns) can be expected.
• Regular reconciliation of invoices will ensure better compliance.
• A lower volume of invoices at the end of the quarter will reduce the burden.

For Large Taxpayers

• Taxpayers can claim GST credit every month.
• Better cash management is possible.
• Confidence to work with small taxpayers will incur.

Points To Remember While Filing For IFF

• Opting in for this facility is not mandatory (It is optional).
• A format for the Invoice Furnishing Facility is yet to be notified.
• The facility can be employed only for the first two months of a quarter. For the last month, GSTR-1 has to be filed.
• Taxpayers don’t have to upload the invoices in the GSTR-1 if the same has been uploaded in the Invoice Furnishing Facility.
• Here, ‘Small Taxpayers’ means Taxpayers who file their GSTR-1 returns quarterly ( taxpayers whose aggregate turnover is less than INR 1.5 crore).

Conclusion

In summary, the Invoice Furnishing Facility (IFF) streamlines the reporting of outward supplies in the GST system by allowing eligible taxpayers to furnish necessary details before the regular GSTR-1 filing, benefiting both the supplier and the recipient in terms of efficient input tax credit reconciliation.