The Goods and Services Tax Network (GSTN) continuously enhances its GST portal with new functionalities to simplify taxpayer compliance and auditing processes. A recent addition is the Invoice Management System (IMS), launched on October 14, 2024. This system is designed to improve the accuracy and speed of Input Tax Credit (ITC) claims. This article will delve into the key features, advantages, and operational flow of the IMS, including updates issued up to October 2025.

Latest System Updates

On October 17, 2025, the GSTN issued an advisory confirming enhancements to the IMS. These improvements enable taxpayers to adjust Input Tax Credit (ITC) reversal amounts when credit notes and other specified documents are accepted, ensuring that ITC is reversed only for the portion actually claimed.

As of September 23, 2025, the GSTN announced further modifications to the IMS, effective from the October 2025 tax period. Previously, certain records could not be marked as pending; now, these can be deferred for one tax period (one month for monthly filers, one quarter for quarterly filers). A new feature permits taxpayers to specify the exact ITC amount claimed, allowing for partial or full reversal only for that amount. If ITC was never claimed, no reversal is needed. Additionally, optional remarks can now be added when rejecting or pending records, which will be visible in GSTR-2B and supplier dashboards, enhancing clarity and reconciliation.

An advisory on June 19, 2025, from the GSTN clarified the implications and corrective actions for documents mistakenly rejected within the IMS, affecting both suppliers and recipients.

What is the Invoice Management System (IMS) Under GST?

The Invoice Management System (IMS) is a recently implemented function on the GST portal, introduced in late 2024. It enables recipient taxpayers to accept, reject, or temporarily defer invoices that their suppliers have saved or filed. Discrepancies between invoices submitted by suppliers and returns by recipients pose a considerable challenge for taxpayers claiming Input Tax Credits (ITC). IMS addresses this by allowing registered recipients to reconcile their records against invoices declared by suppliers in their GSTR-1, thereby simplifying the ITC claim procedure for recipients.

Key Features of the Invoice Management System (IMS)

• Accept/Reject/Pending Options: Recipients can categorize each document (including invoices, credit notes, and amendments) as Accepted, Rejected, or Pending for a single tax period, which provides time for dispute resolution or verification. If no action is taken, the document is considered 'deemed accepted'.
• ITC Reversal Flexibility: Taxpayers specify the precise ITC claimed and are only required to reverse the corresponding amount upon accepting a pending credit note or amendment. If ITC was not originally claimed, no reversal is necessary.
• Remarks for Better Communication: When recipients reject or pend a document, they can add optional remarks. These remarks become visible in GSTR-2B and on the supplier dashboards, fostering clearer communication and smoother reconciliation between transacting parties.
• Dashboard Summary: All incoming records are categorized by type, such as B2B invoices, credit notes, or amendments. The system provides summary counts for each action status: No action, Accepted, Rejected, and Pending, which simplifies decision-making and audit processes.
• Automatic GSTR-2B Integration: Only documents marked as 'Accepted' are integrated into GSTR-2B for claiming ITC. Items that are pending or rejected are temporarily excluded until their status is resolved. Failure to act before the GSTR-3B filing deadline results in automatic 'deemed acceptance'.
• Bulk Actions & Download: Users can select numerous records to perform bulk actions and download Excel spreadsheets for simplified auditing and review.
• Supplier Invoice Amendment: Suppliers now have the capability to amend documents they have already submitted via GSTR-1A. These amendments then undergo review through the IMS in the subsequent tax period.
• Compliance-Friendly: The IMS is designed not to increase compliance burden, as any unaddressed action defaults to 'deemed acceptance.' The workflow is efficient for taxpayers, requiring no manual effort for invoices that remain unchanged.

How Does the Invoice Management System Work?

A major hurdle for taxpayers in GST compliance involves claiming Input Tax Credit (ITC). The IMS functionality is anticipated to alleviate several key challenges in this procedure.

• Initially, suppliers must submit and save their GSTR-1 by the 11th of each month, or use the Invoice Furnishing Facility (IFF), or make amendments to already submitted invoices via GSTR-1A on the GST portal. GSTR-1A can be filed until the taxpayer submits their GSTR-3B for that specific tax period.
• Upon a supplier saving and submitting an invoice, it will become visible on the recipient taxpayer's IMS dashboard and subsequently in GSTR-2B.
• The IMS dashboard displays essential details such as the supplier's GSTIN, trade name, invoice number, and the invoice type.
• Recipient taxpayers have three choices: ACCEPT, REJECT, or PENDING. These actions must be completed between the time the supplier uploads the invoice (via GSTR-1/IFF/1A) and the recipient files their GSTR-3B by the 20th of the respective month. If an action is taken on an invoice after the 14th of the month, recipients must recompute the draft GSTR-2B.
• If a recipient selects 'ACCEPT', the invoice is then included in their auto-generated ITC statement, or GSTR-2B, which is typically generated on the 14th of each month.
• Should a recipient opt to 'REJECT' an invoice submitted by a supplier, that invoice will not be incorporated into the recipient's ITC report or GSTR-2B.
• If a recipient chooses to mark an invoice as 'PENDING', the portal will exclude it from GSTR-2B for the current month and carry it over to the following month within the IMS.
• If a recipient fails to take any action on an invoice, the system will automatically treat it as 'deemed accepted' and incorporate it into the recipient's GSTR-2B.
• If a supplier modifies an invoice that was previously accepted or pending, the updated invoice will supersede the original, requiring the recipient to act on the revised document.
• When suppliers submit amendments in GSTR-1 via GSTR-1A, the revised data is transferred through IMS to the recipient's GSTR-2B, appearing in the following month.
• Taxpayers are permitted to utilize 'PENDING' invoices in subsequent months, provided they adhere to the maximum time limit specified under Section 16(4) of the CGST Act, 2017.

Specified Records Allowed as Pending Only for One Tax Period

Certain specific records can only be marked as pending for a single tax period: one month for taxpayers filing monthly returns and one quarter for those filing quarterly.

These include:

• Credit notes, or upward amendment of credit note
• Downward amendment of credit note where original credit note rejected
• Downward amendment of Invoice/debit note only where original Invoice already accepted and 3B has been filed
• ECO-Document downward amendment only where original accepted, and 3B has been filed

After the designated period, recipients must either accept or reject these records. If no action is taken, the system will automatically consider the record as 'deemed accepted'.

Upon accepting these specified records, taxpayers will be asked if ITC needs to be reduced. Choosing 'No' implies ITC was not previously claimed, thus no reversal is required. Opting for 'Yes' indicates either a full or partial reversal. For partial reversals, taxpayers can optionally specify the reversal amount. For full reversals, no amount declaration is necessary, and the entire ITC value is reversed.

The IMS now includes a feature allowing taxpayers to record remarks when rejecting or pending any record. These remarks are shared with the supplier and reflected in GSTR-2B, enhancing transparency and communication. Furthermore, providing remarks is mandatory when declaring a partial or no reversal of Input Tax Credit (ITC) for credit notes and comparable documents.

How to Use IMS on the GST Portal?

As a buyer or vendor, you can access the IMS feature on the GST portal by logging in with your credentials.

Step 1: Login to the GST Portal

Access the GST portal. Navigate to 'Services' > 'Returns' > then click 'Invoice Management System (IMS)'. You can view both the supplier dashboard for outward supplies and the recipient dashboard for inward supplies by selecting the 'View' button on the corresponding tiles.

Step 2: View Summary of Invoices on the IMS Dashboard

As a buyer, the IMS dashboard displays all purchase/inward supply invoices reported by your GST-registered suppliers via their GSTR-1, GSTR-1A, or IFF. Invoices are categorized under headings like B2B invoices, CGST Section 9(5) invoices from e-commerce operators, and original/amended credit and debit notes. The dashboard summarizes the number of records for each category based on your actions: 'No action,' 'Accepted,' 'Rejected,' or 'Pending'.

Step 3: Take Actions on Invoices

Choose an action button: 'A' for Accept, 'R' for Reject, or 'P' for Keep it Pending. If no button is selected, it will be registered as 'no action taken'. Click 'Save' to confirm your actions. You can use filters or the search option to locate specific invoices and download records with their statuses in an Excel spreadsheet.

Note: It is crucial to be aware that failing to act on invoices before filing GSTR-3B will result in their deemed acceptance.

Upon accepting specific records, such as credit notes, their amendments, or downward amendments of invoices/debit notes, the recipient taxpayer will be prompted with the question: "Does ITC need to be reduced for this record?", offering 'Yes' or 'No' options. Choosing 'No' signifies that no ITC was previously claimed, thus no reversal is necessary, even if the record is accepted. Choosing 'Yes' indicates either a full or partial ITC reversal. For partial reversals, the taxpayer has the option to declare the precise amount to be reversed. For full reversals, no amount declaration is needed, and the ITC will be reduced by the full value of the record.

The IMS now includes a feature allowing taxpayers to record remarks when rejecting or pending any record. These remarks are shared with the supplier and reflected in GSTR-2B, enhancing transparency and communication. Furthermore, providing remarks is mandatory when declaring a partial or no reversal of Input Tax Credit (ITC) for credit notes and comparable documents.

Step 4: Manage Pending Invoices

To defer specific invoices or credit/debit notes for later review, you must select 'P' (Pending). While some deferment is possible, ensure you accept or reject the document by the Input Tax Credit claim deadline, as stipulated under CGST Section 16(4). Delays can impact your working capital. Important: Certain records, including credit notes, their amendments, and downward adjustments of invoices/debit notes, can only be held pending for one tax period. Beyond this period, the pending option becomes inactive, and inaction will result in deemed acceptance.

Step 5: Generate or Recompute GSTR-2B

Typically, GSTR-2B for the preceding month is available after the 14th of each month. If a buyer does not take any action in IMS post the 14th, that GSTR-2B becomes final for claiming ITC in GSTR-3B. However, if any action or change is made after the 14th for the previous month, the system activates the 'Compute GSTR-2B' button to generate a revised GSTR-2B.

Step 6: File GSTR-3B

Once all required actions are completed within the IMS, GSTR-2B will reflect these actions, with accepted invoices/debit notes appearing under the 'ITC Available' section. These details will then populate the relevant sections of Table 4 in GSTR-3B. Taxpayers should review this information, make any necessary corrections for discrepancies, and then proceed with filing GSTR-3B.

How Taxpayers Manage Invoices and Claim Input Tax Credit

Presently, taxpayers must navigate several stages to manage incoming invoices, reconcile them, and then claim Input Tax Credit (ITC) based on these reconciled documents. These stages include:

• Collecting Records from Purchase Register: Initially, a recipient taxpayer needs to gather all relevant records from their purchase register.
• Download GSTR-2A: After suppliers file their GSTR-1, which includes all supporting documentation, details of inward invoices become visible in the recipient taxpayer's GSTR-2A form.
• Download GSTR-2B: The portal automatically generates GSTR-2B on the 14th of each month. Taxpayers must obtain this auto-generated ITC statement as a component of their ITC claim process.
• Reconciling GSTR-2A and Purchase Register: Upon receiving the pre-filled GSTR-2A form for a given month, a taxpayer compares it against each entry in their purchase register records.
• Reconciling GSTR-1 with Sales Register: This reconciliation helps taxpayers confirm the accuracy of their outward supplies.
• Reconciling GSTR-3B and GSTR-1: This crucial step aids in precisely calculating the GST liability.
• Matching GSTR-2B with GSTR-3B: This matching process ensures the correct utilization of ITC when settling GST liabilities.

Additionally, larger businesses must reconcile e-way bills with invoices to prevent inconsistencies and potential compliance problems in the future.

Impact and Resolutions for Incorrect IMS Actions

• If a recipient mistakenly rejects a document in IMS, reports this, and files GSTR-3B, they can request the supplier to resubmit the document in GSTR-1A for the same period or as an amendment in GSTR-1 for a later period. This allows the recipient to correctly accept the document in the appropriate tax period.
• Regarding the supplier's position concerning a rejected invoice, this action does not result in an increased liability for the supplier.
• Recipients can reverse claimed ITC by accepting an amended credit note issued by the supplier within IMS. Once GSTR-2B is recomputed, the ITC will be adjusted by the full amended value.
• Concerning the supplier's impact from a rejected credit note, initially, the liability is added back to their unsubmitted GSTR-3B. However, once the supplier re-reports the credit note in GSTR-1A for the same period or GSTR-1 for the next period, their liability decreases accordingly.

Benefits of the Invoice Management System

The IMS provides several advantages for both small and large enterprises.

• Precision Auditing: IMS enables auditors to meticulously review each invoice from a single interface, significantly reducing the potential for auditing errors.
• Reduced GSTR-3B Errors: The system provides a consolidated overview of all inward invoices, ensuring taxpayers do not overlook any documents before filing their GSTR-3B.
• Simplified Handling of Pending Invoices: Invoices marked as pending are automatically carried forward to subsequent tax periods without impacting GSTR-2B and GSTR-3B for the current period.
• Accessible to QRMP Taxpayers: This new invoice management system is beneficial for small businesses and extends its availability to QRMP (Quarterly Return Monthly Payment) taxpayers. However, for QRMP filers, GSTR-2B will not be automatically populated for the first two months of a quarter; instead, it will be generated on a quarterly basis.