Mandatory IMS: A Step-by-Step Guide for GST Businesses

The Invoice Management System (IMS) has been live on the GST portal since the October 2024 tax period. Taking action in IMS is still not compulsory: any invoice you leave untouched is deemed accepted when GSTR-2B is generated. But since 1 October 2025, Section 38 of the CGST Act (as amended by the Finance Act 2025, brought into force by Notification 16/2025-Central Tax) builds GSTR-2B on the basis of the action you take, so IMS is where your ITC is now decided.

If you have been ignoring the IMS tab, you are accepting everything your suppliers report, including errors and fake invoices. Here is how IMS works, what actions you can take, and what happens if you do not.

What IMS Does

IMS is a feature on the GST portal that gives you control over which supplier invoices flow into your GSTR-2B as available ITC (and therefore, which ITC is auto-populated in GSTR-3B).

Before IMS, all invoices reported by your suppliers in their GSTR-1 automatically appeared in your GSTR-2B as available ITC. You had no way to reject an invoice at the portal level before it entered your ITC statement.

With IMS, you can review each inward invoice and decide its status. GSTN's advisory describes IMS as a facilitation: your intervention is needed only when a record has to be rejected or kept pending.

The 3 Actions in IMS

When you log in to the GST portal and open IMS, you will see the records reported by your suppliers. For each record, you have three options:

1. Accept

You confirm the invoice is correct, you received the goods or services, and you want to claim ITC on it. Accepted records go into the "ITC Available" section of GSTR-2B and auto-populate in GSTR-3B.

2. Reject

The invoice is incorrect, disputed, or you did not receive the supply. Rejected records go into the "ITC Rejected" section of GSTR-2B and are not auto-populated in GSTR-3B. The supplier can see your action and can correct the record through GSTR-1A or a later GSTR-1.

3. Keep Pending

You need time to verify. Pending records are left out of GSTR-2B for that period and stay on the IMS dashboard for action in a later month. An invoice can be kept pending only until the Section 16(4) time limit for claiming its ITC. From the October 2025 tax period, credit notes (and certain amendments) can also be kept pending, but only for one tax period (one month, or one quarter for QRMP recipients). After that, Pending is disabled and the record is deemed accepted if you do nothing.

How Non-Action Works

This is critical: if you do not take any action on a record in IMS, the system treats it as deemed accepted at the time of GSTR-2B generation. The invoice flows into your GSTR-2B as available ITC.

This means:

• If someone reports a fake invoice against your GSTIN and you do not reject it in IMS, it appears as your available ITC
• If there is an amount mismatch and you do not flag it, the supplier's figure flows through
• If you received goods but the invoice details are wrong, the wrong details become part of your ITC record

Ignoring IMS is the same as accepting everything your suppliers report.

Step-by-Step: How to Use IMS

Step 1: Log In and Navigate to IMS

Log in to the GST portal (gst.gov.in) with your credentials. Go to Services, then Returns, then Invoice Management System (IMS) Dashboard.

Step 2: Review the Invoice List

IMS shows records as soon as your suppliers save them in GSTR-1, GSTR-1A or IFF, though only records in a filed return are counted in GSTR-2B. Each invoice shows:

• Supplier GSTIN and name
• Invoice number and date
• Taxable value
• IGST, CGST, SGST, and cess amounts
• Place of supply

Step 3: Match Against Your Records

Compare each invoice in IMS against your purchase register or accounting records:

• Does the invoice number match?
• Is the amount correct?
• Did you actually receive the goods or services?
• Is the GST rate applied correctly?

Step 4: Take Action

For each invoice:

• Click Accept if everything matches
• Click Reject if the invoice is wrong, fake, or disputed
• Click Pending if you need more time to verify

From the October 2025 tax period you can also add a remark when you reject or keep a record pending.

Step 5: Act Before GSTR-2B Generation, or Recompute

Draft GSTR-2B is generated on the 14th of the following month (for quarterly filers, on the 14th of the month after the quarter). Try to finish IMS actions before that date. You can still accept, reject or keep records pending after the 14th, up to the filing of GSTR-3B, but you must then recompute GSTR-2B from the IMS dashboard so the revised figures reach GSTR-3B.

Step 6: Verify GSTR-2B

After GSTR-2B is generated, review it to confirm that:

• Accepted and deemed accepted invoices appear under ITC Available
• Rejected invoices appear under ITC Rejected
• Pending invoices are excluded from this period

Impact on ITC Claims

IMS directly controls the ITC shown in GSTR-2B and auto-populated in GSTR-3B:

The ITC figures in GSTR-3B Table 4 can still be edited; there is no notified hard block on claiming ITC above GSTR-2B. However, Section 16(2)(aa) and Rule 36(4) allow ITC only on invoices that appear in GSTR-2B, and if the ITC you claim exceeds GSTR-2B beyond the limit set on the portal, you receive a DRC-01C intimation (Rule 88D) asking you to explain or reverse the difference.

Common Mistakes to Avoid

1. Not Checking IMS at All

Many businesses have been ignoring IMS since it was introduced. Skipping IMS review means every invoice is deemed accepted blindly.

2. Bulk Accepting Without Verification

Some businesses accept all invoices without matching against their records. This can lead to accepting fraudulent invoices, which may trigger scrutiny and demand notices.

3. Forgetting to Recompute GSTR-2B

If you act on invoices after the 14th, GSTR-2B does not update on its own. Recompute it before filing GSTR-3B, or the late actions will not be reflected. Once GSTR-3B is filed, actions for that period can no longer be changed.

4. Not Following Up on Rejected Invoices

When you reject an invoice, the supplier sees the rejection. But if neither party follows up, the invoice stays unresolved. Coordinate with your supplier to amend the invoice or issue a credit note.

5. Ignoring Deemed Accepted Invoices

Review the deemed accepted invoices in GSTR-2B. If any of them should have been rejected and GSTR-3B is already filed, you will need to reverse the ITC in a later GSTR-3B, which is more complicated than rejecting upfront.

IMS and the GSTR-3B Locks

IMS decides the ITC side of GSTR-3B. The locks that GSTN has actually notified are on the liability side:

• From the July 2025 tax period, the tax liability in GSTR-3B Table 3 is auto-populated from GSTR-1/1A/IFF and cannot be edited in GSTR-3B (GSTN advisory, 7 June 2025). Corrections go through GSTR-1A.
• From the November 2025 tax period, Table 3.2 (inter-state supplies to unregistered persons, composition dealers and UIN holders) is also non-editable.
• From 1 October 2025, under the amended Section 34(2), a supplier's output tax is reduced by a credit note only if the recipient reverses the matching ITC. Rejecting a credit note in IMS increases the supplier's liability in their next GSTR-3B.

There is no notified "Zero Mismatch" rule that blocks GSTR-3B when ITC exceeds GSTR-2B. Managing IMS properly simply makes your GSTR-2B accurate, so the ITC you claim matches it and you avoid DRC-01C intimations and later demands.

Timeline for Monthly IMS Workflow

Let Tax Garden Manage Your IMS

Reviewing every inward invoice monthly, matching against your books, and taking timely IMS actions requires consistent effort. Tax Garden's Compliance Standard plan includes IMS management, GSTR-2B reconciliation, and GSTR-3B filing every month.

Frequently Asked Questions

What happens if I take no action on an invoice in IMS?

Any invoice left without action is treated as deemed accepted when GSTR-2B is generated on the 14th, so it appears in your GSTR-2B as available ITC. That includes fake or wrong invoices reported against your GSTIN. Review the IMS list against your purchase register and reject anything you did not actually receive. You can still act after the 14th, until you file GSTR-3B, by recomputing GSTR-2B.

Does accepting an invoice in IMS mean I can automatically claim the ITC?

No. Acceptance only makes the invoice appear as available ITC in GSTR-2B. You still have to meet all conditions under Section 16: you must hold the invoice, have received the goods or services, the supplier must have paid the tax, and you must pay the supplier within 180 days under Rule 37. Blocked credits under Section 17(5) remain ineligible even if accepted.

Which documents do not appear in IMS?

IMS shows records your suppliers report in GSTR-1, GSTR-1A and IFF. Reverse charge supplies reported by the supplier in Table 4B skip IMS and go straight to GSTR-3B, as do records where ITC is not available because of the Section 16(4) time limit or place of supply rules. Imports of goods and reverse charge purchases from unregistered persons are not reported by a supplier at all, so track them in your purchase register.

What is the time limit to claim ITC on an invoice that shows up late in IMS?

If a supplier reports an FY 2025-26 invoice late, you can accept it in IMS and claim the ITC in the GSTR-3B of the period in which it appears in GSTR-2B, but only up to 30 November 2026 or the date of filing the FY 2025-26 annual return, whichever is earlier, as required by Section 16(4).

Can my accountant take IMS actions on my behalf?

Yes. Anyone with your GST portal login, such as your accountant or a GST practitioner authorised on the portal, can accept, reject or keep invoices pending. Since IMS decisions directly change your ITC, agree on clear rules first, such as rejecting invoices not found in the purchase register, and keep a log of each action for later reconciliation or notices.