GST WEEKLY UPDATE :33/2024-25 (17.11.2024) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. Advisory regarding IMS during initial phase of its implementation:

Invoice Management System (IMS) is an optional facility introduced from October 2024 on GST Portal, on which the invoices/records saved/furnished by the supplier in GSTR-1/1A/IFF, can be accepted, rejected or kept pending by recipients. Based on the action taken by the recipient on the IMS, system will generate the GSTR 2B of the recipient on 14th of subsequent month.

The Taxpayer can accept/reject/keep pending the invoice/record on IMS after due verification from his accounts. The ITC for the rejected record will not be available to the recipient in the GSTR 2B. Further, the liability and input tax credit is being auto -populated in GSTR 3B of the taxpayer on the portal based on his liability declared in GSTR 1/1A and input tax credit made available in his GSTR 2B. However, the taxpayer can presently edit the said auto-populated details in GSTR 3B before filing the same.

IMS, being a new functionality introduced on the portal, there may be cases where in the initial phase of implementation of IMS, the recipient may make error/mistake while taking action (like acceptance/rejection/keeping pending) on the IMS in respect of an invoice/record. As GSTR-2B of the recipient will be generated on the portal based on the actions taken by the recipient on the IMS, any mistake in the action taken by the recipient on the IMS could result in incorrect details of available/eligible input tax credit to the recipient being shown in his GSTR-2B, which will also be auto-populated in his GSTR-3B on the portal. In such cases, the recipient can change the action on the IMS in respect of an invoice/record ( e.g. from rejected to accepted or vice versa) and can recompute his GSTR-2B at any time till the filing of GSTR-3B for the corresponding tax period, so that correct ITC is auto-populated in his GSTR-3B.

Despite this, there may still be some cases, where the recipient is not able to correct the action taken on the IMS, resulting in wrong auto-population of ITC in GSTR-3B of the recipient or wrong auto-population of liability in GSTR-3B of the corresponding supplier. Therefore, during this initial phase of implementation of IMS, the taxpayers are advised that in such cases, where due to any inadvertent mistake in the action taken on the IMS, if incorrect details of ITC/ liability are auto-populated in GSTR-3B on the portal, the taxpayer may before filing their GSTR-3B return, edit such wrongly populated ITC/liability in their GSTR-3B, to correctly avail ITC or pay correct tax liability based on the factual position as per the documents/records available with him.

2. Advisory on IMS on Supplier View:

Invoice Management System (IMS) has been made available on the GST Portal from 14th October, 2024 wherein the recipient taxpayer can accept, reject or keep the invoices pending which are saved/filed by their suppliers in their respective GSTR-1/1A/IFF. This is to further inform you that the first GSTR-2B on the basis of such actions taken in IMS by the recipient taxpayers will be generated on 14th November, 2024 for October-2024 period.

To further facilitate the taxpayers, the Supplier Viewof IMS has also been made available where the action taken by their recipients on the records/invoices reported in GSTR-1/1A/IFF, will be visible to the suppliers in ‘Supplier View’ functionality. This will help a supplier taxpayer to see the action taken on their reported outwards supplies and will help to avoid any wrong action taken by the recipient taxpayer.

Also, kindly note that the below mentioned records/invoices are not available in IMS for taking any kind of actions by the recipient but are visible in supplier view with the status as ‘No Action Taken’:

Documents where ITC is not eligible either due to POS rule or Section 16(4) of the CGST Act,

Records attracting RCM Supplies

Further, this is to be reiterated again that any action taken on records can be changed by the recipient taxpayer till the filing of GSTR-3B of the return period. In case the taxpayer changes any action after the generation of GSTR-2B, they need to click the GSTR-2B recompute button to recompute their GSTR-2B based on the new actions taken.

3. Important advisory on GSTR 2B and IMS:

It has been reported by few taxpayers that their GSTR-2B for October-2024 period has not been generated on 14th November, 2024. In this regard it to be informed that as per the design of IMS, GSTR-2B will not be generated by the system in below scenarios:

In case the taxpayer has opted for QRMP scheme (Quarterly filers), GSTR-2B will not be generated for first and second month of the quarter. Ex. For quarter Oct-Dec, 2024, the quarterly taxpayer will get GSTR-2B for December-2024 period only and not for October-2024 & November-2024.

In case the taxpayer has not filed their previous period GSTR-3B, GSTR-2B will not be generated by the system. Such taxpayers need to file their pending GSTR-3B in order to generate GSTR-2B on demand. For example, if the taxpayer has not filed GSTR-3B for September-2024, their GSTR-2B for October-2024 will not be generated. Once the taxpayer files their GSTR-3B for September-2024, they will be able to generate their GSTR-2B for October-2024 by clicking Compute GSTR-2B (OCT 2024) button on the IMS dashboard.

4. Advisory on Proper Entry of RR No./Parcel Way Bill (PWB) Numbers in EWB system Post EWB-PMS Integration:

Subject: Guidance for Accurate Entry of RR No./Parcel Way Bill (PWB) Numbers following the Integration of E-Way Bill (EWB) with Parcel Management System (PMS)

It is to inform that the Parcel Management System (PMS) of Indian Railways has now been integrated with the E-Way Bill (EWB) system via Application Programming Interfaces (APIs). This integration facilitates the seamless transfer of RR No./Parcel Way Bill (PWB) data from Railways to e-way bill portal, ensuring better traceability and compliance.

In light of this, it is important that taxpayers follow the correct process for entering Parcel Way Bill numbers into the EWB system. Adherence to the guidelines below will help avoid any potential discrepancies or mismatches.

1.    Applicability of RR No./PWB Entry in the EWB System

Taxpayers transporting goods via the Indian Railways Parcel Management System (PMS) must ensure the correct Parcel Way Bill (PWB) number or RR No. is furnished in the e-way bill Part-B on EWB Portal. The format for entering RR No./PWB numbers has been standardized to ensure consistency and accuracy.

2.Updating Part-B of EWB for Rail Transportation

1. Suppliers with a pre-existing E-Way Bill (EWB) for goods transported from the factory to the railway station, and who are subsequently transporting goods by rail under the Parcel Management System (PMS), must follow these steps:
   1. Update Part-B of the E-Way Bill using the “Multi-Transport Mode” option on the EWB portal.
   2. In the updated section, select Rail as the mode of

After selecting this option, the system will prompt you to enter the corresponding RR No./Parcel Way Bill (PWB) number.

3.    Format for Entering the RR No./PWB Number

The Parcel Way Bill number must be entered in the following format:

1. PXXXRRNo, where:
   1. P stands for the Parcel Management System (PMS).
   2. XXX refers to the From Station Code of the originating railway

• RRNo is the actual Railway Receipt number issued for the

Example:

If the Railway Receipt number in the PMS system is 2020-307306, it should be entered as PNZM2020-307306 where P stands for PMS , NZM stands for the originating station code and then the RR No. in the EWB system to avoid any validation errors.

4.    RR Number for FOIS or Leased Wagons

For goods transported via the Freight Operations Information System (FOIS) or Leased Wagons, the process for entering the RR number remains the same as in previous advisories. The Railway Receipt number must be entered in the EWB system exactly as shown in the RR receipt, without any changes or formatting alterations.

5.    EWB and RR No./PWB Number Validation

After entering the RR No./PWB number into the EWB system:

1. The EWB system will validate the RR No./PWB number against the data received from the Parcel Management System (PMS) of Railways.
2. If a mismatch is detected or the RR No./PWB number is not found in the database, an alert will be generated. Therefore, it is advised that taxpayers ensure the correct entry of RR /PWB numbers to avoid future discrepancies

6.    Importance of Accurate Entry

It is crucial for taxpayers to ensure that the Parcel Way Bill number is entered correctly in the EWB system to allow smooth tracking and verification of goods being transported via Indian Railways. Accurate entry will also facilitate the validation process and avoid unnecessary delays or complications.

7.    Assistance and Clarifications

      For further assistance or if there are any discrepancies in entering RR No./PWB numbers, taxpayers are encouraged to raise a ticket with the support team, clearly mentioning the RR No./PWB number.

5. AAR & Important Decisions:

(i) Hon’ble Bombay High Court Decision Regarding ITC on advance receipt document has been allowable:

(Applicant – L&T IHI Consortium)

The Bombay High Court allowed L&T IHI Consortium to claim ITC on GST paid on advance received from MMRDA for the Atal Setu project,

The Court held that a ‘Receipt Voucher’ issued by L&T qualifies as a valid tax document under Section 31, enabling the consortium to claim ITC under Section 16 for services intended for business use. It dismissed challenges to the vires of Sections 7, 12, 13, and 16(2)(b), ruling that advances received in government contracts, even for deferred supplies, constitute “consideration” for supply in furtherance of business, thereby attracting GST. The Court stressed the need for revenue authorities to consider the peculiarities of transactions in such cases, highlighting that denying ITC despite GST payment contradicts the GST framework. The Court affirmed that the receipt of advance payment creates a supply obligation under Sections 7, 12, and 13, and rejected claims that deferred supplies fall outside the scope of GST liability.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

(Author is a well known Chartered Accountant Practicing in the fields of Direct and Indirect Taxation at Ahmedabad)