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What is Invoice Furnishing Facility (IFF) under GST


August 11, 2021

IFF Under GST

As it comes to the full form, IFF meaning in GST is Invoice Furnishing Facility that helps small taxpayers to upload their invoices every month. Goods and Services tax network (GSTN) has made it possible via the GST portal.

What does it mean by Invoice Furnishing Facility (IFF)?

 IFF meaning is the Invoice Furnishing Facility under GST  that is a  facility for quarterly GSTR 1 filers who can upload their invoices every month via Invoice Furnishing Facility (IFF) in GST. It is based on rule 59(2) of CGST rules for the registered taxpayer with an annual aggregate turnover of up to 5 crores. Below mentioned points should be kept in mind as you go for IFF GST:

  • It’s an optional facility and its nonusage would not invoke any late fee.
  • The invoices of the last month of the quarter must be uploaded in the GSTR1 return only.
  • In case it has been uploaded in the IFF, no need to upload invoices in GSTR1.
  • Rs 50 crore is the limit per month for the value of invoices that could be uploaded.
  • The details furnished in IFF would be shown in the GSTR 2A and GSTR 2B of the recipients.

Provisions that governing the IFF

Through the notification (no 8220) - dated 10th November 2020 ( CGST (13TH Amendment ) Rules,2021, Entire rule 59 of the Central Goods and Services Tax rules,2017 was amended.

The amended rule 59, with effect from 1st January 2021, has the provisions relating to Invoice Furnishing Facility. The provisions are briefly summarized as :

  • The facility is open to the registered taxpayer filing GSTR 1 return quarterly.
  • Since IFF is optional, the registered person needs to go either for IFF or not.
  • The registered taxpayer choosing for IFF has to submit the outward supply details in the following way;

Period

Form for furnishing the details

Particulars

The first month of the quarter

Invoice Furnishing Facility

B2B transactions

The second month of the quarter

Invoice Furnishing Facility

B2B transactions

Quarter

Form GSTR 1

All the transactions of the third month and backlog transactions of the first and second month

  • Under the IFF, the details have to be furnished within a period of 13 days from the end of the respective month.
  • Under IFF, the details up to a cumulative value of INR 50 lakh for each month could be filed.
  • Details already submitted through IFF shall not be resubmitted as the taxpayer files GSTR1 Form.

 

Who can utilize IFF?

The small taxpayers who have chosen the QRMP scheme to file their GSTR 1 return every quarter could use the IFF in GST. It is to be borne in mind that unleash a taxpayer opts to upload invoice details via IFF, he should upload all invoice details for three months of the quarter in the GSTR 1 return.

 

What is the purpose of IFF?

If a taxpayer’s aggregate turnover is less than Rs 5 crore in the previous financial year, he could file his GSTR1 and GSTR3B  every quarter by choosing the QRMP scheme. It reduces the compliance burden of small-scale taxpayers. But it also causes some issues for the taxpayers who make some purchases from QRMP taxpayers by claiming Input Tax Credit (ITC).

For instance, as a buyer makes a purchase of goods from a QRMP taxpayer in the course of a quarter, the buyer should have to wait till the end of the quarter to make a claim for ITC. It is because a small taxpayer could upload the invoices and finish the GSTR1 filing only after the quarter is finished. It may cause a delay in making a claim for ITC  because the buyer could claim full ITC only as the invoice appears in his/her GSTR 2B.

So IFF in GST was introduced under the QRMP scheme to eradicate their burden allowing QRMP taxpayers to upload chosen or all B2B invoices on the GST portal by means of IFF for the first two months of the quarter. In effect, buyers could make a claim for ITC without any delay.

 

The due date for IFF and GSTR1 

The registered taxpayer who has been chosen for IFF should be careful about the following due dates.

Period

Form

Due date

January

IFF

13th February

February

IFF

13th March

March

GSTR-1

13th April

April

IFF

13th May

May

IFF

13th June

June

GSTR-1

13th July

July

IFF

13th August

August

IFF

13th September

September

GSTR-1

13th October

October

IFF

13th November

November

IFF

13th December

December

GSTR-1

13th January

Details to be provided in the Invoice Furnishing Facility:

The following details in the table are furnished by the small-scale taxpayers as they choose for IFF in GST.

Table

Corresponding information to be furnished

Table 4A; 4B; 4C and 6B; 6C 

B2B Invoices Details of sales transactions

Table 9B – Credit or Debit Notes (Registered)

Details of credit notes or debit notes issued during the month

Table 9A 

Amended B2B invoices

Table 9C 

Amended Credit or Debit Notes (Registered)

Business to business transaction details submitted through IFF would be correspondingly reflected in Form GSTR 2A, Form GSTR 2B, Form GSTR 4A or Form GSTR 6A of the recipient of goods or services or both.

How to utilize Invoice Furnishing Facility (IFF)?

Since the invoice Furnishing Facility is optional for the taxpayers under the QRMP scheme. The GST portal has given a timeline to opt-in & opt-out of the scheme. The GST portal has provided the facility for the first two months of the quarter only, as the taxpayer stayed in the scheme. The business-to-business invoices have to be uploaded via IFF in GST, from the 1st to the 13th of the month following the relevant month.

Steps to file Invoice Furnishing Facility on GST portal

The registered taxpayer to file details via IFF should go through the following steps on the GST portal.

Step 1: Enter the official site of GST https://www.gst.gov.in/. 

Step 2: Then log in by providing username, password, and character shown.

Step 3: Click on ‘services’ and from the list select returns and returns dashboard accordingly.

Step 4: Choose the appropriate ‘Financial year’ and ‘Period’ and click SEARCH

Step 5: Then Table ‘Details of the outward supplies of goods or services -IFF optional “ would appear.

Step 6: Then choose ‘PREPARE ONLINE’ for filing through online mode. However, choose ‘PREPARE OFFLINE’ for filing IFF through offline mode.

Step 7: Submit the details as applicable.

Step 8: Submit IFF either via DSC or EVC.

 

What are the advantages of using IFF?

Unlike GSTR 1, a delay in upload of Business to business invoices beyond the cut-off date for a month (13th of next month) would not invoke late fees. Whereas the registered buyer may lose ITC  for the month as it postpones to the next month.

  • The invoice Furnishing Facility is optional and flexible. In case it opts in the first month of a particular quarter, there is no such norm that it has to be selected for the second month of the same quarter.
  • Buyers of goods from small taxpayers could make a claim of ITC  every month.
  • The B2B sales details uploaded on the IFF in GST would be shown or auto-populated into the relevant GSTR 1, therefore it avoids the rentering.
  • It consists of monthly data reconciliation, which would finally make quarterly return filing easy.
  • By furnishing faster ITC  claims, small taxpayers could improve their business.
  • For instance, the QRMP scheme holder submitted B2B data on IFF by the 13th of next month but forgot to complete the process of filing IFF  for the month by the 13th. He would be let to file IFF after the 13th, given the data is submitted already on or before the 13th of the next month.
  • By reducing the volume of invoices to be uploaded at the end of the quarter, it eases the burden of compliance.

 

It is a wise move to lend a helping hand to small taxpayers and buyers from small taxpayers. IFF would enhance the business of small taxpayers by furnishing faster ITC claims to their buyers. Anyway, this may cause an increase in compliance costs for them. Moreover, data has to be categorized as B2B and non B2B transactions to report on IFF in GST. As soon as the invoices are uploaded and filed on IFF, it is auto-populated into the quarterly GSTR1, and it is not possible to edit or delete. So a taxpayer has to make a differentiation between the benefit of choosing for IFF  and the cost involved. In case the QRMP taxpayer makes larger volumes of B2B invoices than B2C invoices within a quarter. It is better to opt-in for IFF. Moreover, the effect of business with their customer has to be kept in mind well.

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