Invoice Management System (IMS) under GST ITC
11 Oct 2025
Invoice Management System (IMS) under GST ITC
What is IMS?
Core Purpose: To allow recipients to Accept, Reject, or mark as Pending the invoices/records uploaded by their suppliers in GSTR-1/IFF. This action directly determines the ITC that flows into their GSTR-2B.
The Invoice Management System (IMS) is a transformative functionality on the GST portal that shifts the ITC verification process from a passive to an active model. It provides a formal channel for recipients to communicate with their suppliers regarding invoices.
Key Principle: “No Action” means Deemed Acceptance. This ensures no additional compliance burden for taxpayers with trustworthy supply chains.
Objective : To enhance the accuracy of ITC claims, reduce mismatches, and create a self-policing ecosystem.
2. Key Features & Functioning of IMS
Access: Dashboard > Services > Returns > Invoice Management System (IMS) Dashboard
Launch Date: Effective from 1st October 2024 for taxpayer actions
Eligible Taxpayers: Normal taxpayers (including SEZ units/developers) and casual taxpayers
Data Flow: Invoices/records appear in the recipient’s IMS as soon as the supplier saves them in GSTR-1/IFF/1A
Action Window: Recipients can take actions from the time the invoice appears until the filing of the corresponding GSTR-3B
3. The Action Framework & Impact on ITC
| Action | Impact on GSTR-2B & ITC |
| Accept | Record moves to “ITC Available” in GSTR-2B. ITC auto-populates in GSTR-3B. |
| Reject | Record moves to “ ITC Rejected ” in GSTR-2B. ITC does not autopopulate in GSTR-3B. |
| Pending | Record does not become part of GSTR-2B for that month. It remains in IMS for future action. |
| No Action | Treated as “Deemed Accepted” at the time of GSTR-2B generation. ITC will be available. |
4. Important New Changes (Effective October 2025 Tax Period)
The recent GST advisories dated 23rd September 2025 & 08th October 2025 have introduced significant clarifications and enhancements.
A. Limited "Pending" Action for Specified Records:
The option to mark records as “Pending” is now available for a limited time—one tax period (one month for monthly filers, one quarter for QRMP filers). This applies to:
• Original Credit Notes (CN)
• Upward amendments of Credit Notes
• Downward amendments of CN where the original CN was rejected
• Downward amendments of Invoices/Debit Notes where the original was accepted and
GSTR-3B has been filed.
• Upward amendments of Credit Notes
• Downward amendments of CN where the original CN was rejected
• Downward amendments of Invoices/Debit Notes where the original was accepted and
GSTR-3B has been filed.
B. Declaring ITC Reduction Amount (Partial Reversal):
If a recipient has not availed ITC on an invoice, or has availed it only partially, the reversal obligation is limited to the amount actually availed.
Recipients can now declare the exact amount of ITC to be reversed when accepting a Credit Note or similar document.
Use Cases:
• Reverse only a portion of the ITC
• Declare that no ITC was availed, hence no reversal required
• Regularize a reversal already done in a previous period
C. Option to Save Remarks (Coming Soon):
Taxpayers will be able to add optional remarks while Rejecting or marking a record as Pending. These remarks will be visible to the supplier in their “Outward Supplies” view in IMS, facilitating communication and corrective action.
D. Crucial Clarifications (October 2025 Advisory):
• No change in auto-population: ITC will continue to auto-populate from GSTR-2B to GSTR3B. IMS does not alter this mechanism.
• GSTR-2B generation is automatic: It will continue to be generated automatically on the 14th of every month, not manually triggered by taxpayer actions.
5. The GSTR-2B Regeneration Process
• The GSTR-2B generated on the 14th of the month is a draft.
• Recipients can continue to Accept, Reject, or keep records pending even after the 14th, until filing of GSTR-3B.
• If any action is taken or changed after the 14th, taxpayers must click the “COMPUTE GSTR2B” button on the IMS dashboard to regenerate it and reflect the latest actions.
• GSTR-2B can be regenerated any number of times before filing GSTR-3B.
6. Special Scenarios & Rules
Amended Invoices:
• If a supplier edits a saved (but unfiled) invoice, the old record is replaced in IMS and recipient actions are reset.
• If an amendment is filed via GSTR-1A, the amended record flows to IMS and generally overrides the action on the original.
Documents Not Part of IMS:
The following flow directly to GSTR-2B and are not available for action in IMS:
• Invoices from GSTR-5 (Non-Resident) and GSTR-6 (ISD)
• ICEGATE documents (Imports)
• Reverse Charge (RCM) records
• Documents ineligible for ITC due to Place of Supply (POS) rules or time-barred under Section 16(4)
Sequential Filing:
GSTR-2B for a subsequent month will not be generated if the GSTR-3B for the previous period is not filed.
7. Best Practices for Taxpayers
1. Conduct monthly IMS reconciliation before filing GSTR-3B.
2. Use the Partial Reversal facility for Credit Notes to ensure accurate ITC reporting.
3. Communicate with suppliers using IMS and utilize the upcoming “remarks” feature.
4. Use the “Pending” action strategically, keeping in mind its limited validity.
5. Always click “COMPUTE GSTR-2B” if any action is taken after the 14th.
Conclusion
The Invoice Management System (IMS) is a major step toward proactive and transparent ITC management under GST. By enabling taxpayers to accept, reject, or keep invoices pending, IMS promotes real-time reconciliation and supplier accountability.
With the new updates effective from October 2025—including partial ITC reversal, limited “Pending” actions, and the upcoming remarks feature—IMS enhances accuracy, reduces mismatches, and simplifies compliance.
We offer comprehensive support for GST compliance—helping you navigate these changes with confidence and ensuring smooth, accurate, and timely filings.
With TAXOSMART, your tax return is in safe hands.
Stay informed, stay transparent—and most importantly, stay stress-free. Let us help you file smart and secure your financial peace of mind.
DISCLAIMER
The information contained in this document is prepared by R.J. Soni & Associates and TaxOSmart LLP (hereinafter referred to as RJSA) for information purpose only. It does not constitute any legal advice or tax advice. In no way, this document should be treated as a marketing material or efforts to solicit a client. While we have made every attempt to ensure that the information contained in this document is true, RJSA, its partners and/or any of its employees make no claims / guarantee about its accuracy, completeness, or up-to-date character, or warranty, express or implied, including the warranty of opinions expressed for a particular purpose, or assume any liability or responsibility for the accuracy, completeness, or usefulness of any information available from this document.
We offer comprehensive support for GST compliance—helping you navigate these changes with confidence and ensuring smooth, accurate, and timely filings.
With TAXOSMART, your tax return is in safe hands.
Stay informed, stay transparent—and most importantly, stay stress-free. Let us help you file smart and secure your financial peace of mind.
DISCLAIMER
The information contained in this document is prepared by R.J. Soni & Associates and TaxOSmart LLP (hereinafter referred to as RJSA) for information purpose only. It does not constitute any legal advice or tax advice. In no way, this document should be treated as a marketing material or efforts to solicit a client. While we have made every attempt to ensure that the information contained in this document is true, RJSA, its partners and/or any of its employees make no claims / guarantee about its accuracy, completeness, or up-to-date character, or warranty, express or implied, including the warranty of opinions expressed for a particular purpose, or assume any liability or responsibility for the accuracy, completeness, or usefulness of any information available from this document.