In this guide
The Invoice Management System (IMS) has become an important GST reconciliation tool for businesses claiming Input Tax Credit. Through the GST portal, recipients can review purchase invoices, debit notes, credit notes and amendments reported by suppliers before the information ultimately affects GSTR-2B and GSTR-3B.
The IMS Dashboard is available through Services → Returns → Invoice Management System, and supplier-reported records become available for recipient action.
However, IMS should not be treated as a replacement for the purchase register. The safest filing process remains:
Books → IMS → GSTR-2B → ITC eligibility check → GSTR-3B.
Is IMS Mandatory in 2026?
IMS was introduced from the October 2024 return period as an optional facility to help taxpayers accept, reject or keep eligible records pending and reduce ITC mismatches.
But “optional” does not mean reconciliation is unnecessary.
If no action is taken on an eligible IMS record, the system generally treats it as deemed accepted when GSTR-2B is generated. Taxpayers can subsequently change actions and recompute GSTR-2B before filing the corresponding GSTR-3B.
Therefore, ignoring IMS can allow supplier-reported records to flow into the ITC statement without a proper books-level review.
For GST return and ITC reconciliation support:
Accept, Reject or Pending: What Should You Choose?
The three actions should be used carefully.
| IMS Action | When it is generally appropriate | Impact |
|---|---|---|
| Accept | Genuine record belonging to your business | Included appropriately in GSTR-2B |
| Reject | Record does not belong to you or contains a fundamental mismatch requiring supplier correction | Excluded/reported as rejected |
| Pending | Genuine record on which action/ITC should be deferred under permitted IMS conditions | Does not presently flow as available ITC |
| No Action | Nothing selected by recipient | Generally deemed accepted |
A crucial point is that Accept does not automatically mean “eligible ITC.”
A genuine invoice may belong to your business but the corresponding credit may still be blocked or otherwise ineligible under GST law.
Always Match GSTR-2B With Purchase Books
Suppose the purchase register contains 100 invoices but GSTR-2B contains only 96.
The missing four invoices should be investigated.
Possible reasons include:
- Supplier has not reported the invoice;
- Wrong recipient GSTIN was entered;
- Invoice was reported as B2C;
- Supplier filed it in a different tax period;
- Invoice details were amended; or
- Accounting entry itself is incorrect.
Conversely, if GSTR-2B contains an invoice that is missing from your books, do not claim ITC simply because it appears on the portal.
Verify the invoice, receipt of goods/services and all conditions for ITC first.
The GST Council’s guidance also emphasises reconciliation of GSTR-2B with the taxpayer’s books and ensuring that credit is neither duplicated nor incorrectly retained.
IMS Offline Tool Introduced in April 2026
Handling hundreds or thousands of invoices directly through the online IMS dashboard can be cumbersome.
To address this, GSTN introduced the IMS Offline Tool on 21 April 2026. The Excel-based utility is designed to allow action on individual as well as bulk invoices.
This is particularly useful for businesses with:
- Large purchase registers;
- Multiple vendors;
- High invoice volumes; or
- Dedicated GST reconciliation teams.
The offline facility can improve efficiency, but taxpayers should still maintain an audit trail explaining why records were accepted, rejected or kept pending.
How Should Blocked ITC Be Reported in GSTR-3B?
A common mistake is manually reducing the auto-populated figure in Table 4(A) because part of the ITC is ineligible.
The prescribed reporting mechanism is different.
Circular No. 170/02/2022-GST requires permanent/non-reclaimable reversals, including blocked credit under Section 17(5), to be reported in Table 4(B)(1).
For example:
GSTR-2B / Table 4(A) ITC: ₹1,00,000
Blocked ITC under Section 17(5): ₹10,000
The taxpayer should not simply claim that only ₹90,000 existed.
The reporting structure captures the gross ITC and the required permanent reversal, producing net eligible ITC of ₹90,000.
Temporary Reversal Is Different
Not every reversal is permanent.
Temporary reversals that may subsequently become eligible are generally reported in Table 4(B)(2).
Examples can include prescribed situations involving:
- Non-payment to supplier within 180 days;
- Goods or services not yet received; or
- Other ITC temporarily failing applicable conditions.
When the conditions are later satisfied, eligible credit can be reclaimed through the prescribed GSTR-3B mechanism and tracked through the ITC reclaim framework.
Do not mix temporary reversals with permanently blocked Section 17(5) credit.
Important 2025-26 Change for Credit Notes
IMS credit-note functionality has materially improved.
From the October 2025 tax period, specified credit notes and related amendments can be kept pending for a limited period. For monthly taxpayers, the permitted period is generally one tax period; for quarterly taxpayers, one quarter.
Another important improvement is that accepting a credit note does not necessarily require an automatic full ITC reduction.
The recipient can indicate whether ITC relating to the transaction had actually been availed and whether the required reduction is:
- Full;
- Partial; or
- Nil.
This addresses cases where the recipient never availed the corresponding ITC or had already reversed part of it.
Never Ignore an Unexpected Credit Note
An unexpected credit note deserves immediate reconciliation.
But its mere appearance in IMS is not proof of fraud.
Check:
- Supplier name and GSTIN;
- Original transaction;
- Credit-note number and date;
- Reason for issuance;
- Purchase return or commercial adjustment;
- ITC originally claimed; and
- Whether reversal is actually required.
If the document genuinely does not belong to you, use the appropriate rejection process and communicate with the supplier.
Incorrect handling can distort both your ITC and the supplier’s output-tax adjustment.
Practical GSTR-3B Filing Workflow
Before filing each GSTR-3B:
- Reconcile purchase register with GSTR-2B.
- Review IMS records.
- Investigate invoices appearing only in books.
- Investigate invoices appearing only in IMS/2B.
- Check all credit and debit notes.
- Separate eligible and blocked ITC.
- Report permanent reversals in Table 4(B)(1).
- Report qualifying temporary reversals in Table 4(B)(2).
- Review the ITC reclaim ledger.
- Recompute GSTR-2B where IMS actions were changed.
- File GSTR-3B only after the final reconciliation is documented.
For complex GST mismatches or departmental queries:
Frequently Asked Questions
Is IMS compulsory for claiming ITC?
IMS was introduced as an optional facility, but GSTR-2B and books reconciliation remains essential for accurate ITC reporting.
What happens if I take no action in IMS?
An eligible record with no action is generally treated as deemed accepted when GSTR-2B is generated.
Should ineligible ITC be rejected in IMS?
Not merely because it is blocked under Section 17(5). A genuine business invoice and ITC eligibility are separate questions. Permanent blocked credit should be reported through the prescribed GSTR-3B reversal mechanism.
Where is Section 17(5) blocked ITC reversed?
Permanent blocked/ineligible ITC is generally reported in Table 4(B)(1) of GSTR-3B.
Can a credit note now be kept pending?
For specified credit-note records, the facility has been available from the October 2025 period for the prescribed limited time.
Is GSTR-2B reconciliation still required if accounting software is connected to GST?
Yes. Automation can identify differences faster, but the taxpayer must still determine whether each ITC claim satisfies GST law and accurately reflects the underlying transaction.
