Uploading invoices under the new GST returns system

A major concern for taxpayers filing their Goods and Services Tax Returns is the uploading and validation of invoices. The new return system promises to address this concern making invoice management convenient and simple for taxpayers. Let's deep dive into what to expect while uploading an invoice under the GST new return system.

Under the current return filing system, taxpayers must manually report the following invoices to the system through their GSTR-1 filing before the designated due date.

• Taxable business-to-business(B2B) supplies
• A certain category of business-to-customers(B2C) supplies
• Exports

Once the new GST returns system is introduced, instead of reporting the taxable business to business supplies in a return, the same is updated in an annexure. Additionally, suppliers can upload invoices online on a continuous basis under ANX-1. The invoice will then be made available to the buyer for validation. The recipient or buyer will be required to take action on the uploaded invoice viz. accept or reject the invoice, or mark it as pending within a time frame.

Let's understand how this system works.

In case the buyer chooses to 'accept' or 'deemed locking', they will be able to claim the input tax credit in their corresponding RET-1/RET-2/RET-3. On acceptance of the invoice, the supplier will not be able to edit the invoice as it will be deemed for locking. If in case there are any corrections, the recipient or buyer will be required to reject the invoice and the same will be populated in the ANX-1 form in the following month.

In the case the buyer chooses to 'reject' the invoice, they will be unable to claim ITC, and the seller will be notified of the rejection online. The buyer will also be required to communicate to the supplier/seller and request them to make amendments or corrections in the invoice and file the same under ANX-1 in the subsequent month.

There is also a third scenario under which the buyer can Mark the invoice as pending and postpone their ITC claim to the following month. But the buyer can only mark an invoice as pending under the following scenarios -

• If the buyer has not received the supply
• If the buyer wishes to postpone the claiming of input tax credit
• If the buyer is not sure about claiming the input tax credit

In such a situation, the invoice will be filled in the next month's ANX-2 of the buyer, till a return period earlier of September of the next financial year or the due date of filing an annual return for the relevant financial year.

What if the buyer does not take any action?
If the buyer fails to take any action on the invoice, all the invoices for the tax period will be considered as 'deemed to be locked'/accepted, at the time of filing the RET-1/RET-2/RET-3 in the corresponding tax period.

Invoice management under the GST new returns system is likely to become much easier. Additionally, the introduction of e-invoicing will help make the whole return filing process a lot more efficient.

To help you understand the new GST returns, we have broken down the system in a few essential topics, each answering the most critical questions around the New Returns under GST.

Mention all the links under this series

• GST 2.0 - Introduction to New GST Returns
• What to file under new GST returns system
• Features of the new GST returns system
• Changes under the new GST returns system
• New GST returns vs old GST returns
• New GST Return Offline Tool
• Timeline for New GST Return