To ease the process of tax payment, on 1st January 2021, the Government of India introduced IFF in GST. This significantly reduced the burden of taxpayers as they can file GST on a monthly basis to avoid overloading at the end of the quarter. However, opting for an IFF is optional, and you will not have to pay any penalties if you do not file one. Keep reading to know more about IFF.
Invoice furnishing facility is a feature that you can use to pay GST during the first and second month of a quarter. However, it is not mandatory that you have to pay IFF in the second month of a quarter as well on using IFF in its first month.
If you use IFF GST for a month, you do not have to re-upload the same information while filing GSTR-1 at the end of the quarter. Instead, the information gets automatically reflected in the GSTR-2A and 2B forms, saving your time and minimising the chances of errors.
An IFF also improves business relationships significantly. This is so because the small taxpayers and buyers of these small taxpayers will not have to wait till the end of a quarter for ITC claims. This can ensure a continuous inflow of funds that can escalate a business to the next level.
The importance of IFF in GST is based on the following:
If you fill out the IFF form every month, you can save yourself from the burden of filing the quarterly GSTR-1 form.
You do not have to worry if you miss out on the due date of filing IFF, as you can file it even after the due date.
You will not have to wait for a quarter ending to claim ITC (Input Tax Credit). Instead, you can claim it every month to escalate your business.
Even if you miss out on any invoices from the previous month, you can upload the same on the next month or at the quarter end.
You must fulfil some eligibility criteria for filing GST IFF which are as follows:
You must keep in mind that the total value of monthly invoices that you are filing must not exceed Rs. 50 Lakhs.
It is essential that you are a quarterly taxpayer and file GSTR-1 under the QRMP scheme.
Your business must have an aggregate annual turnover of Rs. 5 Crores.
You can only add B2B invoices, B2BA invoices, CDNR invoices and CDNRA invoices.
You only need to fill out IFF if you do not want to spend additional time on filing the GSTR-1 form at the end of three months.
You need to fill in the following details in the appropriate table while filing for an IFF GST:
Details about B2B transactions, including both goods and services in tables 4A, 4B, 4C, 6B, and 6C.
Any amendment details with respect to previous B2B supply details in table 9A.
Details about debit notes or credit notes issued to a registered taxable person are in table 9B.
Amendment details with respect to debit and credit notes in table GSTR 9C.
You can file GST for the current month within the 13th of the following month. For example, you can file GST for the month of October within the 13th of November. However, if you miss out on filing any invoice for a particular month, you can upload the same in the following month's IFF or during the quarterly filing of the GSTR-1 form. Also, you will not have to pay any penalty in case you miss out on its due date.
You will need to follow the steps below to furnish GST IFF details:
Step 1: Use your credentials to log in to the GST portal.
Step 2: Move to the ‘Services’ tab.
Step 3: Click on the ‘Returns’ tab to view the Returns dashboard.
Step 4: Move to ‘File Returns’ page.
Step 5: Select financial year and filing period.
Step 6: Click on the ‘Search’ button.
Step 7: Select IFF option.
Step 8: Select ‘Prepare Online’ to enter details via the online GST portal or select ‘Prepare Offline’ to use the Returns Offline Tools.
Step 9: Upload the JSON files containing all the essential and related details.
Step 10: Click on the ‘Generate IFF summary’ button to preview your IFF form.
Step 11: Acknowledge it and click on ‘Submit’ button.
You can follow the above steps to file the GST Returns for 1st and 2nd month of a quarter. However, for the third month, you will have to fill out the GSTR-1 form, which is available in the 'File Returns' section. Then you will have to select ‘File with EVC’ (Electronic Verification Code) or ‘File with DSC’ (Digital Signature Certificate) as per your convenience.
The benefits of invoice furnishing facility are as follows:
You have a flexibility to opt for IFF for one month of a quarter and not choose it for next month of the same quarter.
You do not need to pay any late fees if you upload the B2B invoices after the 13th of a month. At most, the ITC gets deferred to the next month on late upload of these invoices.
If you purchase goods from small taxpayers, you can file ITC for every month of a quarter.
IFF makes the filing of quarterly returns easier.
Once you enter the details of B2B details on IFF, it is automatically reflected on relevant quarterly GSTR-2A and 2B. This saves you time as you do not have to re-enter these details.
It is beneficial to small business owners as they are provided with faster ITC claims.
Reduces your burden of uploading all invoices at the end of a quarter.
IFF in GST is undoubtedly a blessing for taxpayers as it significantly reduces the burden of filing GST quarterly. However, you must keep in mind its eligibility criteria to be able to enjoy its benefits.
IFF is a facility that taxpayers under QRMP scheme can avail to file their GST for the 1st and 2nd month of a quarter. This ensures that they pass on the credit to their recipients at the end of each month without having to wait for the quarter end.
The preconditions for furnishing IFF are as follows:
You must have a valid user ID and password.
You must pay your taxes on a regular basis.
It is mandatory to furnish the GSTR-1 at the end of the quarter.
No, IFF is available only for the 1st and 2nd month of a quarter. For the 3rd month, you will have to file the GST using a GSTR-1 form.
Yes, before submitting an IFF form, you can view the details you have entered. As soon as you add the invoices, you will get to see a 'Preview' button. Once you click on it, a summary of the IFF draft will get automatically downloaded. From there, you can view the details that you have entered.
No, you must keep in mind that once you click on the 'Submit' button, you will not be able to change any information that you are providing. Hence, it is mandatory that you review all the information that you have provided to stay away from errors.
No, you will not have to pay any late fees on filing IFF after the due date.
You can follow the steps below to view your furnished IFF forms:
Log in to your GST portal.
Proceed through Returns > Services > Returns Dashboard.
Select fiscal year and Return furnishing period.
Click on the search button to view the IFF form.