GST

All About Invoice Furnishing Facility (IFF)

Understanding Invoice Furnishing Facility (IFF) Under GST

Goods and services are taxable at a single tax rate under the GST system, which is imposed consistently across the country. The Goods and Services Tax Network (GSTN) has enabled the Invoice Furnishing Facility (IFF) procedure to be implemented on the GST Portal. Taxpayers who submit GSTR-1 every quarter are now provided with the choice to upload their invoices each month via the Invoice Furnishing Facility. The quarterly GSTR-1 reporting section applies explicitly to taxpayers with revenue of up to Rs 1.5 crore, classifying them as smaller enterprises.

What is Invoice Furnishing Facility (IFF)?

The Invoice Furnishing Facility came into effect on January 1 of 2021. For those who submit GSTR-1 quarterly and only use the QRMP scheme, there is the Invoice Furnishing Facility . Businesses can upload their business-to-business (B2B) invoices every month during the first two months of a quarter starting on January 1, 2021, due to a discretionary option offered by the IFF under the QRMP system.

The Central Goods and Services Tax Rules, 2017, Rule 59(2), governs the IFF’s operating structure. In accordance with Rule 59(2), the mechanism is simple and straightforward. Businesses can use the IFF to provide invoice information if they file quarterly returns. The IFF is responsible for providing information on B2B transactions, including goods or services delivery to registered businesses.

The IFF can only be used to report transactions in both the first and second month of a quarter; remembering is vital. The IFF can be used between the first and thirteenth days following the current month. The IFF makes it easy to record outward supplies (B2B transactions) up to a monthly cap of INR 50 Lakhs in total value.

Pre-requisites for filing Invoice Furnishing Facility (IFF)

The following requirements must be met before you can start using the invoice furnishing facility (IFF):

  • A registered taxpayer must have decided to file their GST returns quarterly under the QRMP program.
  • If you had previously been enrolled in the composition scheme, you must have chosen to leave it simultaneously as you decided to switch to filing your GST returns every quarter under the QRMP scheme.
  • You must have already submitted your most current applicable monthly or quarterly GST return on the GST Portal before choosing the QRMP scheme and using the IFF.
  • In order to use the GST Portal and the IFF, you must have a current User ID and password.
  • As part of the QRMP plan, you should have chosen to file Form GSTR-1 (which is for reporting outward supplies) and Form GSTR-38 [monthly summary return) on a quarterly basis.
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Benefits of Invoice Furnishing Facility (IFF)

Businesses, especially those using the QRMP scheme, can benefit from several advantages provided by the Invoice Furnishing Facility (IFF). The Goods and Services Tax (GST) framework’s novel feature streamlines compliance processes and improves operational effectiveness.

  1. Ease of ITC for Purchases from Small Taxpayers: Companies that buy goods from small taxpayers benefit from the IFF. It enables these companies to submit claims for Input Tax Credits (ITC) for each month of a fiscal quarter. This provision makes The ITC claim process more accessible, especially for transactions between modest suppliers.
  2. Simplified Quarterly Returns Filing: Filing of Quarterly Returns is Now Significantly More Simple thanks to IFF. As opposed to submitting all bills at the end of the quarter, businesses can opt to report B2B invoices for the first two months of a quarter using IFF, making the total return filing process simpler and more manageable.
  3. Decision-Making Flexibility: The IFF allows companies to decide when they will utilize the facility throughout a quarter. You can choose to utilize IFF for reporting B2B invoices in one month of a quarter and not use it during the next month. This versatility enables firms to match their reporting to the transactions being made and their operational preferences.
  4. Automated Reflection in GSTR-2A and GSTR-2B: The information from your B2B invoices is automatically reflected in the quarterly GSTR-2A and GSTR-2B forms when you enter them into the IFF. By automating the process, you can save time and effort by doing away with unnecessary data entering. It helps to ensure that your reported bills and the related refunds are consistent.
  5. Small Company Owners’ Expeditious ITC Claims: The IFF offers small company owners several benefits. It enables quicker processing of Input Tax Credit (ITC) requests, facilitating faster funding access. This quick ITC claim process can significantly improve small businesses’ cash flow, strengthening their financial stability.
  6. Ease of use: The IFF is intended to be intuitive and straightforward to access on the GST portal1. Due to its simplicity, the reporting process can be quickly completed by companies without the need for substantial training or specialized knowledge.
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What is to be submitted for Invoice Furnishing Facility (IFF)

Tables that are to be filled:

  • B2B invoice details – 4A, 4B, 4C, 6B, 6C 
  • Amended B2B invoices – 9A
  • Details debit and credit Notes which are registered – 9B
  • Amended debit and credit Notes which are registered – 9C

Conclusion

In conclusion, the GST framework’s Invoice Furnishing Facility (IFF) is a crucial instrument that gives companies an efficient way to record B2B transactions. IFF is a shining example of efficiency by minimizing mistakes, accelerating ITC claims and enabling businesses to handle GST compliance with greater simplicity and precision.

Frequently Asked Questions

  1. What is the limit of gstr1 IFF?

    The limit of GSTR 1 IFF is Rs fifty Lakhs.

  2. Is filing of IFF mandatory?

    No, filing of IFF is not mandatory. It is optional.

  3. What are the benefits of IFF in GST?

    Some of the benefits of IFF are flexibility in decision making, no late fees; it is optional, the ITC can be claimed monthly, the compliance burden is eased etc.

  4. Who can opt for IFF in GST?

    The individuals or the companies that are registered and file GSTR 1 can opt for IFF in GST; the annual turnover should be up to five crores.

  5. What is the meaning of GSTR 1 IFF?

    Under QRMP, taxpayers can access the Invoice Furnishing Facility (IFF). These taxpayers can now provide information regarding their outward supplies made during the first two months of the quarter (known as M1 and M2). They can transfer credits to the beneficiaries because of this successfully.

  6. What is the difference between GSTR 1 and IFF?

    GSTR-1 only contains details regarding these transactions. Businesses that submit GSTR-1 on a quarterly basis can offer their B2B invoices using the Invoice Furnishing Facility (IFF), which serves as a platform.

  7. Why do we file IFF in GST?

    Filing an IFF in the context of GST is to offer details regarding outward supplies made during the first two months of a quarter (M1 and M2). This makes it easier to provide credit to the right people.

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References

  1. https://www.gst.gov.in/

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