Handling of Inadvertently Rejected invoices on IMS

With the implementation of the Invoice Management System (IMS) under GST, reconciliation of Input Tax Credit (ITC) has become more automated and transparent. However, the transition to this system also brings new challenges. One such issue taxpayers are facing is handling of inadvertently rejected invoices or credit/debit notes by the recipients on the IMS portal, which can have a direct impact on the availability of ITC and on supplier liabilities.

To address these practical challenges, the GSTN has issued an advisory to clarify the mechanism for handling such inadvertently rejected records. Here’s a detailed look at the key questions and responses that help both suppliers and recipients resolve these issues effectively.

Question 1: How can a recipient avail ITC of wrongly rejected Invoices/ Debit notes/ECO-Documents in IMS as corresponding GSTR-3B of same tax period was also filed by recipient?

In such cases the recipient can request the corresponding supplier to report the same record (without any change) in the same return period’s GSTR-1A or respective amendment table of subsequent GSTR-1/IFF. Thus, recipient can avail the ITC basis on amended record by accepting such record on IMS and recomputing GSTR-2B on IMS. Here the recipient will get ITC of completed amended value as the original record was rejected by the recipient.

However, the recipient will be able to take ITC for the again furnished document by the supplier, as stated above, only in the GSTR-2B of the concerned tax-period.

Question 2: If any original record is rejected by the recipient and supplier furnishes the same record in GSTR-1A of same tax period or in the amendment table of GSTR-1/IFF of subsequent period, till the specified time limit, then what impact will it have on supplier’s liability?

In case supplier had furnished an original record in GSTR-1/IFF but the same record was rejected wrongly by the recipient in IMS. In such cases supplier on noticing the same in the supplier’s view of IMS dashboard or on request of recipient, may furnish the same record again (without any change) in GSTR-1A of same tax period or in the amendment table of GSTR-1/IFF in any subsequent period, till the specified time limit, then the liability of supplier will not increase. As amendment table takes delta value only. Thus, in the present case of same values, differential liability increase will be zero.

Question 3: As a recipient taxpayer, how to reverse ITC of wrongly rejected Credit note in IMS as the corresponding GSTR-3B has already been filed?

In such cases the recipient can request the supplier concerned to furnish the same Credit note (CN) without any change in the same return period’s GSTR-1A or in amendment table of subsequent period’s GSTR-1/IFF.

Now the recipient can reverse the availed ITC based on the amended CN by accepting the CN on IMS. Hence, the recipient’s ITC will get reduced with complete amended value, as soon as the recipient recomputes GSTR-2B on IMS. The reduced value is the same as that of the value of original CN as in this case the complete original CN was rejected by the recipient.

Question 4: If any original Credit note was rejected by the recipient and supplier furnishes the same credit note in GSTR-1A of same tax period or in the amendment table of GSTR-1/IFF of any future tax-period, till the specified time limit, then what impact it will have on supplier’s liability?

At first instant the supplier’s liability will be added back in the open GSTR-3B return, because of original credit note rejection by the recipient. However, as the supplier furnishes the same credit note in GSTR- 1A of same tax period or in amendment table of GSTR-1/IFF in any subsequent period, supplier’s liability for this amendment will get reduced again corresponding to the value of amended CN (which in this case is same as original). Thus, the net effect on the liability of supplier will be only once.

Consolidated Implications for Recipients & Suppliers

This summary captures all the key actions and outcomes:

Recipients who accidentally reject documents but have already filed GSTR‑3B can still claim or reverse ITC. They need the supplier to re‑file the identical record in GSTR‑1A or the amendment table, accept it on IMS, and recompute GSTR‑2B.
Suppliers re‑filing unchanged invoices or debit notes face no additional liability, and credit notes only have a temporary liability correction that neutralizes upon acceptance.

Also Read: Supplier View in IMS: Supplier Role, Addressing Common Errors, Invoice Rejections Affect Supplier Liability

Timelines and Deadlines for Corrections

While IMS offers a correction path, there are strict time limits to re-report and amend rejected records:

Amendments or corrections for any financial year can be made until 30th November of the following financial year or the date of filing GSTR-9 (Annual Return), whichever is earlier.
Beyond this date, no changes to GSTR‑1/IFF can be made, meaning any rejected records left uncorrected by then will lead to permanent ITC loss or unresolved liability.
Recipients and suppliers should closely track monthly IMS reports and reconcile promptly to ensure timely corrections.

Example:
If an invoice from FY 2024–25 was wrongly rejected, the supplier has time to amend it only up to 30th Nov 2025 (unless GSTR-9 is filed earlier).

With IMS introduction, IRIS GST is providing below key facilities from recipient angle:

1. Advanced IMS Data Handling and Reconciliation:

Bulk GET of IMS data for faster, more comprehensive access.
Perform advanced reconciliation across multiple GSTINs in one go.
A one-to-many and many-to-many invoice linkage facility is available

2. Bulk Actioning and Communication:

Execute bulk actions (accept, reject, or mark invoices as pending) on IMS data.
Enable bulk vendor communication to resolve mismatches and discrepancies in real time. Also helps in communicating rejected and pending actions to the supplier

3. Integrated IMS + GSTR-2A Data Insights:

Enhance decision-making with synchronized GSTR-2A and IMS data.
Identify discrepancies such as tax rate mismatches for more precise ITC decisions.

How This Benefits the Taxpayer

Deeper Insights: Get a more comprehensive view of IMS data with tax rate-level reconciliation results.
Informed Decision-Making: Easily accept, reject, or mark invoices as pending based on robust reconciliation insights.
Improved Accuracy: Identify mismatches more effectively, such as tax rate discrepancies between the Purchase Register and auto-populated data, ensuring that mismatched invoices are correctly categorized for IMS action.

Conclusion

The IMS framework is designed to promote accurate ITC decision making by recipient and finalizing Liability impact for supplier based on recipient actioning. However, errors like inadvertent rejections can disrupt the flow of ITC and affect return filing. Thankfully, the government has released this new advisory on handling rejected invoices on IMS. The remedy lies in coordinated action between suppliers and recipients where records can be re-furnished and accepted again using GSTR-1A or amendment tables, ensuring that both ITC and tax liabilities are accurately restored.

Taxpayers must remain vigilant while accepting or rejecting records in IMS and act promptly in case of any discrepancy. With these corrective provisions, the GSTN aims to simplify and secure the reconciliation process for all stakeholders.

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