How IMS in GST Reshapes Your Daily Invoice Workflow

The Invoice Management System (IMS) on the GST portal, live since the October 2024 tax period, is no longer a feature you can safely ignore. Acting in IMS is not compulsory: anything you leave untouched is deemed accepted. But from 1 October 2025, the amended Section 38 of the CGST Act builds your GSTR-2B on the basis of your IMS actions, so skipping IMS means accepting every supplier record, right or wrong.

For most Indian SMEs, this means adding a review step to a routine that did not have one. Here is what the workflow looks like.

Before IMS: How Your GST Workflow Used to Work

The old process was straightforward:

1. Receive invoices from suppliers
2. Record purchases in your books
3. At month-end, total up your ITC
4. File GSTR-3B with ITC figures from your books
5. If there was a mismatch with GSTR-2B, deal with it later

This "file first, reconcile later" approach carried risk even then: since January 2022, Rule 36(4) allows ITC only on invoices shown in GSTR-2B, and excess ITC can trigger a DRC-01C intimation (Rule 88D). The portal does not block the filing, but the mismatch is flagged.

After IMS: Your New Monthly Workflow

The workflow now has a review step:

Week 1-2: Receive and Record Invoices

Continue recording purchase invoices in your accounting software as usual. No change here.

By the 13th: Review IMS on the GST Portal

This is the new step. Log in to the GST portal and open the IMS dashboard. You will see every record your suppliers have saved in their GSTR-1, GSTR-1A or IFF.

For each invoice, decide:

• Accept: The invoice is correct, you received the supply, you want the ITC. This is the most common action.
• Reject: The invoice is wrong, disputed, or you never received the supply. The supplier can see the rejection.
• Pending: You need more time to verify. The invoice is excluded from this month's GSTR-2B.

14th: GSTR-2B Generated

On the 14th, the system generates your draft GSTR-2B based on your IMS actions. Accepted invoices appear as available ITC, rejected ones under ITC Rejected, and pending ones are left out.

Any invoice you did not act on is deemed accepted and included. You can still change actions until you file GSTR-3B, but you must then recompute GSTR-2B.

15th-19th: Prepare GSTR-3B

ITC from GSTR-2B is auto-populated in GSTR-3B. The ITC fields remain editable, but the ITC you claim should match GSTR-2B: claiming more than GSTR-2B beyond the limit set on the portal triggers a DRC-01C intimation. The tax liability in Table 3 is locked to your GSTR-1/1A figures from the July 2025 tax period.

20th: File GSTR-3B

Submit your return with reconciled ITC figures by the 20th (monthly filers).

What This Means for a Typical Small Business

If You Have 10-20 Suppliers

You will review 10-20 invoices in IMS each month. This takes about 15-30 minutes if your records are organized.

If You Have 50-100 Suppliers

Reviewing 50-100 invoices manually takes 1-2 hours. The portal also offers an Excel-based IMS Offline Tool for bulk actions, and many accounting packages integrate IMS review into the purchase workflow.

If You Have 100+ Suppliers

Manual IMS review is not practical. You need software-assisted reconciliation or a compliance service like Tax Garden to manage IMS actions on your behalf.

The Real Problem: Supplier Non-Filing

The biggest operational challenge with IMS is not the review process itself. It is dealing with suppliers who do not file GSTR-1 on time.

If your supplier has not saved the invoice in GSTR-1 or IFF, it does not appear in your IMS at all, and if the return is not filed, it does not reach your GSTR-2B. You have the invoice in your books and paid the supplier including GST, but the ITC is not yet available.

What You Cannot Do

• You cannot manually add the invoice to IMS
• You cannot claim ITC on it under Section 16(2)(aa) and Rule 36(4) until it appears in GSTR-2B
• You cannot claim it after the Section 16(4) time limit

What You Can Do

• Follow up with the supplier and request immediate GSTR-1 filing
• Claim the ITC in a future period once it appears in GSTR-2B
• Track all unmatched invoices in a separate register
• Consider adding GSTR-1 filing compliance as a clause in supplier agreements

Deemed Acceptance: The Hidden Risk

When you do not take any action on an invoice in IMS, the system treats it as deemed accepted. This sounds convenient but creates two risks:

Risk 1: Fake Invoices

If a supplier (or someone misusing a GSTIN) reports a fake invoice against your GSTIN, it is deemed accepted into your GSTR-2B and auto-populated in GSTR-3B. You will have ITC you are not entitled to, which can trigger scrutiny or demand notices.

Risk 2: Incorrect Amounts

If a supplier reports the wrong taxable value or tax amount, the incorrect figure flows into your GSTR-2B and GSTR-3B. If you then claim a different figure based on your books, the mismatch can lead to a DRC-01C intimation or a later notice.

Both risks are avoided by actively reviewing IMS every month.

How IMS Connects to Other GST Changes

IMS does not exist in isolation. It sits alongside several other changes:

Practical Tips for SME Owners

1. Set a calendar reminder for the 10th of every month to review IMS. Do not wait until the 13th.

2. Keep your purchase register up to date in real time, not at month-end. You need it ready when IMS review time comes.

3. Build a supplier compliance tracker. Record which suppliers file GSTR-1 on time and which are consistently late. This helps you prioritize follow-ups.

4. Do not ignore pending invoices indefinitely. If an invoice has been pending for 2 or more months, either accept it (if verified) or reject it. Pending invoices accumulate and create confusion, and credit notes can be kept pending for only one tax period.

5. Train your accountant on IMS. Many accountants still file GSTR-3B based on book figures alone. They need to incorporate IMS review into their process.

Common Questions from SME Owners

Many business owners are encountering IMS for the first time. The most frequent concerns:

"I did not change anything in my business. Why is filing suddenly harder?" The GST system evolved. IMS was introduced to let recipients check supplier invoices before they become ITC, which helps curb fraudulent ITC claims, but it also adds review work for legitimate businesses. It is available to all regular taxpayers who file GSTR-3B.

"Can my CA handle IMS for me?" Yes. Your CA or accountant can log in to the GST portal and manage IMS actions on your behalf. Many CAs are now offering IMS management as part of their monthly GST filing service.

"What if I accidentally reject a valid invoice?" If you have not filed GSTR-3B for that period, change the action to accept and recompute GSTR-2B. If the return is already filed, ask the supplier to amend the invoice through GSTR-1A or a later GSTR-1, and accept the amended record when it appears in IMS.

Let Tax Garden Manage Your IMS Workflow

IMS adds a monthly compliance step that requires invoice-by-invoice verification. Tax Garden's Compliance Standard plan includes IMS management, GSTR-2B reconciliation, supplier follow-up, and GSTR-3B filing.

Frequently Asked Questions

Can I change an IMS action after GSTR-2B is generated on the 14th?

Yes, until you file GSTR-3B for that period. If you accept, reject or mark pending after the 14th, use the option to recompute GSTR-2B so the revised figures flow into GSTR-3B. Once GSTR-3B is filed, the actions for that period are frozen, and any correction has to come through a supplier amendment or an adjustment in a later return.

What happens if I wrongly reject a valid supplier invoice in IMS?

If GSTR-3B for the period is not yet filed, change the action to accept and recompute GSTR-2B. If the return is already filed, the rejected invoice does not come back on its own, so ask the supplier to amend it through GSTR-1A or a later GSTR-1. The amended record then appears in IMS and can be accepted in a future period.

What happens to a supplier when I reject a credit note in IMS?

A credit note reduces the supplier's output tax and your ITC. If you reject it in IMS, it is not accepted for reducing the supplier's liability, so their tax payable increases in the next GSTR-3B. Suppliers therefore follow up on rejected credit notes quickly, and both sides should agree before rejecting one to avoid disputes over tax paid.

How long can I keep an invoice pending in IMS?

A pending invoice is excluded from the current GSTR-2B and carried forward, but ITC on it must still be taken within the Section 16(4) time limit: 30 November after the end of the financial year or the date you file the annual return, whichever is earlier. Credit notes can be kept pending for only one tax period, after which they are deemed accepted if you do nothing.

Is IMS useful if I file GSTR-3B quarterly under QRMP?

Yes. IMS shows invoices uploaded by your suppliers through GSTR-1 and IFF throughout the quarter, and you can act on them at any time. For quarterly filers, GSTR-2B for the quarter is generated on the 14th of the month after the quarter, so complete IMS actions before that date, or recompute GSTR-2B before filing GSTR-3B.