What Is the Invoice Management System
The Invoice Management System, or IMS, is a function on the GST portal that lets a recipient of goods or services Accept, Reject, or keep Pending each invoice, debit note, or credit note that a supplier has filed in GSTR-1, GSTR-1A, or the Invoice Furnishing Facility. It was built to give businesses a direct say over which supplier-reported documents feed into their input tax credit, rather than accepting everything a supplier reports by default.
The Shift From Automatic to Action-Based ITC
Notification No. 16/2025-Central Tax, dated 17 September 2025, brought key Finance Act, 2025 provisions into force from 1 October 2025, including a change to Section 38 of the CGST Act that replaced the term ‘Auto Generated Statement’ with simply ‘Statement.’ In practice, this marks a shift away from GSTR-2B and GSTR-3B populating automatically from whatever a supplier files. Now, only invoices, debit notes, and credit notes that you actively Accept, or that are deemed accepted, in IMS will flow into your GSTR-2B and then auto-populate the ITC table in GSTR-3B. Records left Pending or marked Rejected will not count toward your credit.
New Rules on Credit Note Reversals
A new proviso to Section 34(2) of the CGST Act now explicitly requires a recipient to reverse any input tax credit already availed when a credit note is used to reduce the supplier’s tax liability. IMS has also been enhanced to let taxpayers modify the ITC reversal amount at the point of accepting a credit note or other specified record, so that only the credit actually availed gets reversed rather than a flat reversal of the full credit note value.
The Offline Tool and Import of Goods Update
An MS Excel-based offline IMS tool was released on 21 April 2026, allowing bulk Accept, Reject, or Pending actions instead of processing records one by one on the portal. IMS has also added an ‘Import of Goods’ section, where the Bill of Entry filed for imports, including imports from SEZs, is made available for the taxpayer to take action on individually.
What Businesses Should Do Before Filing GSTR-3B
Before every GSTR-3B filing, review the IMS dashboard and take a clear action, Accept, Reject, or Pending, on every invoice, debit note, and credit note reported against your GSTIN. Reconcile supplier documents against your purchase register first, since an invoice not received or not matching your records should generally be rejected or kept pending rather than left to default in. Pay particular attention to credit notes, since accepting one without checking the ITC already claimed can trigger an incorrect reversal.
Common Mistakes to Avoid
The most common error is treating IMS as optional and letting records sit unactioned, assuming ITC will flow through as before. Another is accepting credit notes in bulk without verifying the underlying transaction, which can overstate or understate the required reversal. Businesses that reconcile monthly rather than only before the annual return tend to catch mismatches early, when they’re easier to correct.
This post is for general informational purposes and does not constitute tax advice. Please consult us directly for guidance specific to your situation.