What is an Invoice Furnishing Facility (IFF)?

The Invoice Furnishing Facility (IFF) is a means by which businesses in the QRMP scheme can share B2B invoices sooner, rather than at the end of the quarter. The question that many businesses ask is, What is IFF, and why does it exist? 

The answer is quite simple: in the absence of IFF, buyers would take months to receive their input tax credit, which may slow down their cash flow. 

IFF addresses this issue by allowing buyers to upload only the invoices every month, allowing buyers to receive their ITC in time, and business continues to run smoothly.

What is IFF in GST?

Let’s start with the basics. 

Invoice Furnishing Facility is the full form of IFF. This facility is provided on the GST portal to taxpayers who are quarterly GSTR-1 taxpayers under the QRMP scheme. This facility enables you to upload your B2B invoices every month during the first two months of the quarter. 

Therefore, rather than waiting till the end of the quarter to disclose all outward supplies in your GSTR-1, you can use the invoice furnishing facility to share a few (or all) B2B invoices of Month 1 and Month 2. These invoices are then displayed in the seller's GSTR-2B, making it possible to claim ITC (input tax credit) without having to wait until the end of the quarter.

Who Can Use Invoice Furnishing Facilities?

You can use IFF only if:

• You are registered as a normal taxpayer in India under GST. 

• Your annual aggregate turnover is up to ₹5 crore, and you have opted for the QRMP scheme (Quarterly Return, Monthly Payment). 

• You file GSTR-1 and GSTR-3B on a quarterly, not monthly basis. 

You cannot use IFF in GST if:

• Turnover is more than ₹5 crore (you already file return GSTR-1 every month). 

• All your sales are B2C (to unregistered customers), IFF is B2B only invoices. 

• You have not opted for the QRMP scheme. 

Therefore, in case you are a small manufacturing company in Surat with a ₹3 crore turnover on QRMP and selling to distributors with GSTIN, then you must make use of IFF. 

Why Was IFF Introduced?

Imagine a situation where you are filing GSTR-1 quarterly. Your buyer, e.g. one of the large retailers or other businesses, will not see your invoice in GSTR-2B until the end of the quarter. Their ITC gets blocked. Their working capital gets stagnated. To prevent such a situation, the government introduced the Invoice Furnishing Facility (IFF) on 1 January 2021 under Rule 59(2) of the CGST Rules. 

The idea was simple: 

• Allow small taxpayers to maintain quarterly returns to minimise compliance.

• However, enable them to upload B2B invoices at the end of the month to enable buyers to receive ITC in time. 

IFF, in brief, attempts to strike a compromise between your convenience and the cash flow of your buyer. You receive fewer returns on files; your buyer receives punctual ITC. Win-win, if you use it properly.

How Does IFF Work?

In the QRMP scheme, a quarter consists of three months: abbreviate them M1, M2, and M3. 

M1 (first month of quarter)

This month, B2B invoices can be uploaded using IFF between the 1st and 13th of the following month. 

M2 (second month of quarter)

Once again, you have to upload B2B invoices in IFF on the GST portal within the period 1st to 13th of the next month. 

M3 (third month of quarter)

There is no IFF. You submit GSTR-1 every quarter, and it contains:

Invoices of M3 and any pending invoices of M1 and M2 that you did not upload either in M1 or M2. 

Important: 

You can only upload invoices through IFF to a total of ₹50 lakh per month. This is sufficient for small and medium businesses. 

How to File IFF in GST

Now, let us get practical. 

Here is a step-by-step process of filing IFF in GST on the portal: 

Step 1: Log in to the GST Portal

Step 2: Enter using your GSTIN, username and password, and enter OTP where necessary. 

Step 3: Go to the Returns Dashboard

On the top menu, click “Services” → “Returns” → “Returns Dashboard”

You have to choose the financial year and then choose the month (M1 or M2 of the quarter) in which you would like to file IFF.

Step 4: Select “Invoice Furnishing Facility” (IFF).

There will be an option on the dashboard, “Invoice Furnishing Facility (IFF)”, exclusively for the QRMP taxpayers. 

Click on “Prepare Online” if you want to prepare invoices manually. 

Step 5: Enter B2B Invoice Details

This is where the actual filing starts. 

You will be asked to fill: 

• Recipient GSTIN (your buyer’s GST number).

• Invoice number and date.

• Place of supply (state).

• Taxable value.

• GST rate.

• Tax amount.

Step 6: Save, Validate, and Review

Once you have entered invoices, save frequently, or you may lose data. 

Check totals by using the preview or summary option.

Compare with your sales register or accounting data to prevent mismatches at a later time. 

Step 7: Submit and File with DSC or EVC

Once you are satisfied, click Submit.

Then either click File with DSC (in case of digital signature certificate) or File with EVC (with OTP to the registered email/mobile).  

Once invoices get submitted successfully for the given month, the seller can see these invoices in their GSTR-2B and claim ITC.  

Due Dates for IFF in GST

The due date of what is IFF in GST filing, for QRMP taxpayers, is the 13th of next month, during the first two months of each quarter.

Wrapping Up 

Now that you are aware of what IFF is in GST, IFF full form in GST and how to file IFF in GST, you must not see it as an additional compliance obligation, but a simple means to share B2B invoice data early to keep your sellers happy. If you face any difficulties filing IFF in the GST portal or any other software, we highly recommend that you make the switch to Munim GST Return Filing software today. 

Frequently Asked Questions 

What is the IFF limit for GST?

The invoice limit of IFF is ₹50 lakh/month. 

What is the difference between GSTR1 and IFF?

GSTR-1 is the complete return in which all the outward supplies of the whole quarter should be reported. IFF, on the other hand, is optional, and you can only upload specific B2B invoices during the first two months of the quarter so that your purchasers/sellers can avail themselves of monthly ITC.

Is it compulsory to file IFF?

No, there is no compulsory filing of IFF. It is an optional feature that is designed to assist businesses whose purchasers require a monthly Input Tax Credit.

About the author

Mehul Jagwani

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Mehul is a seasoned content writer with a passion for simplifying complex accounting and GST topics. With a keen interest in entrepreneurship and business management, he specializes in creating informative and engaging content for themunim.com. His goal is to help businesses understand and implement accounting and GST software solutions effectively. When he's not crafting content, Mehul enjoys exploring new places and spending time with his Golden Retriever.