One of the issues faced by monthly GST return filers was the delay in receiving GST credit when goods or services or both were purchased from small taxpayers, who file quarterly returns. The Government issued Notification 82/2020 Central Tax on 10 November 2020 to introduce the Invoice Furnishing Facility (IFF). The IFF aims to reduce the burden on large taxpayers and provide a boost to small taxpayers. In this article, we will discuss the IFF in detail.
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 from 01 January 2021.
- 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 an 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.
- 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 burden.
- Taxpayers can claim GST credit every month.
- Better cash management is possible.
- Confidence to work with small taxpayers will incr
- Opting in for this facility is not mandatory (It is optional).
- A format for the IFF 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 IFF.
- Here, ‘Small Taxpayers’ means: Taxpayers who file their GSTR-1 returns quarterly ( taxpayers whose aggregate turnover is less than INR 1.5 crore).