How invoices flow: GSTR-1 → IMS → GSTR-2B → GSTR-3B
- Supplier uploads the invoice in GSTR-1, IFF or GSTR-1A.
- You see it in IMS and choose Accept, Reject or Pending. No action means it is treated as accepted.
- GSTR-2B is generated on the 14th of the next month from the IMS position. If you take action after that, or change an action, you must recompute GSTR-2B from the IMS dashboard before filing GSTR-3B.
- GSTR-3B picks up the ITC from GSTR-2B. Section 16(2)(aa) already limits credit to invoices that appear in GSTR-2B.
What each action does
| Action | Use it when | Effect |
|---|---|---|
| Accept | The invoice is correct and the goods or services were received | Goes into GSTR-2B as ITC available |
| Reject | The invoice is wrong (wrong GSTIN, rate, amount) or not yours | Stays out of GSTR-2B; the supplier has to correct it through GSTR-1A or a later return |
| Pending | The invoice may be right but you cannot claim yet, for example goods not yet received | Stays out of this month’s GSTR-2B and comes up again next period |
| No action | — | Deemed accepted when GSTR-2B is generated |
Deemed acceptance is the trap. An invoice you never looked at is treated as accepted, so the credit flows to GSTR-2B and you are responsible for it if the invoice was wrong.
Credit notes are different
A supplier’s credit note reduces your ITC. Accepting it cuts your credit; rejecting it keeps the supplier’s tax liability where it was. From the October 2025 tax period, GSTN changed the rules: Pending is not allowed for original credit notes, for upward amendments of a credit note, or for downward amendments where the original was rejected; where Pending is allowed for a credit note it can be kept only for a limited time (one more tax period for monthly filers, one more quarter for quarterly filers). When you accept a credit note you can also enter the ITC actually reversed, if you had claimed only part of the original credit.
Read the current GSTN advisory on IMS on the GST portal before relying on a specific option, because the IMS rules have been revised several times since launch.
The GSTR-3B lock: liability is fixed, ITC is checked
From the July 2025 tax period, the outward tax liability that GSTR-3B auto-fills from GSTR-1 can no longer be edited in GSTR-3B. If it is wrong, correct GSTR-1 by filing GSTR-1A before you file GSTR-3B.
The ITC table (Table 4) is auto-filled from GSTR-2B. GSTN said in October 2024 that locking the auto-filled ITC would follow at a later date; at the time of writing, no advisory has notified that date, and Table 4 can still be edited. But claiming more ITC than GSTR-2B shows is policed: under Rule 88D, if ITC in GSTR-3B exceeds GSTR-2B by more than ₹25 lakh and 20%, you get a DRC-01C intimation and must pay back the excess or explain it.
Worked example: a month in IMS
An illustration. A distributor’s IMS for September 2026 shows 180 invoices with ₹4,20,000 of tax.
| Records | Action | ITC effect (₹) |
|---|---|---|
| 176 invoices matching purchase entries | Accept | 3,72,000 |
| 1 invoice charged at 18% on a 5% item | Reject — ask the supplier to correct it | 30,000 not claimed now |
| 2 invoices for goods still in transit | Pending | 18,000 claimed in a later month |
| 1 invoice from an unknown supplier | Reject — not our purchase | 0 (and not deemed accepted) |
| ITC in GSTR-2B after recompute | 3,72,000 |
If the distributor had done nothing, all ₹4,20,000 would have been deemed accepted, including ₹30,000 on a wrong-rate invoice and tax on an invoice that was not theirs.
A monthly IMS routine
- From the 1st: download IMS records and match them to your purchase register by GSTIN, invoice number and tax amount.
- Accept the matched records in bulk; review only the exceptions.
- Reject with a reason and tell the supplier the same day, so the correction lands in their GSTR-1A or next GSTR-1.
- Keep Pending only for real timing reasons, and track pending invoices so they are not forgotten past the section 16(4) deadline.
- Before the 14th, finish your actions so GSTR-2B is generated correctly; after the 14th, recompute.
- Before GSTR-3B: compare Table 4 with GSTR-2B and keep the working for any difference. See the GST due dates calendar and ITC conditions and time limits.
Doing this in software
In SME ERP, the India Compliance app on ERPNext includes a GST Invoice Management System screen and a purchase reconciliation tool that match supplier records with your purchase invoices, so you accept, reject or keep pending against your own books instead of a spreadsheet. Downloading from and uploading to the portal needs your GST API access.
Frequently asked questions
What is IMS in GST?
The Invoice Management System is a GST portal facility, live since 14 October 2024, where a buyer accepts, rejects or keeps pending each invoice uploaded by suppliers. Only accepted or untouched invoices flow into GSTR-2B as input tax credit.
What happens if I take no action in IMS?
The invoice is deemed accepted when GSTR-2B is generated, so its tax flows into your ITC even if it was wrong.
When is GSTR-2B generated?
On the 14th of the following month. If you act on IMS records after that, or change an action, recompute GSTR-2B from the IMS dashboard before filing GSTR-3B.
Can I edit the tax liability in GSTR-3B?
No. From the July 2025 tax period the auto-filled outward liability in GSTR-3B is locked. Correct it through GSTR-1A before filing GSTR-3B.
Is the ITC in GSTR-3B locked too?
At the time of writing, no notified date exists for locking Table 4 ITC, so it can still be edited. Excess ITC over GSTR-2B is checked under Rule 88D, which triggers a DRC-01C notice above ₹25 lakh and 20%.
Practical, India-specific guides from the team behind WebSoftOS cloud ERP, by Ridhi Technologies, Zirakpur, Punjab.