GST IMS and GSTR-2B: New Mechanism to Correct ITC Mismatches in GSTR-3B

The Invoice Management System (IMS) on the Goods and Services Tax (GST) portal lets you review and act on eligible inward-supply records. Those actions affect how records appear in GSTR-2B and the ITC figures that auto-populate in GSTR-3B. Reconcile differences in IMS before filing, then check GSTR-3B and report any adjustments required under GST rules.

From the October 2025 tax period, the Goods and Services Tax Network (GSTN) added two options for credit notes. You can keep a credit note pending for one tax period. When you accept it, you can also declare how much ITC to reduce. Earlier, the portal reversed the full ITC on every accepted credit note, even when you had never claimed that credit.

What is IMS and which records does it cover?

IMS is a dashboard on the GST portal that became available for taxpayer actions on 14 October 2024. Supplier-reported invoices, debit notes, credit notes and amendments saved or filed through GSTR-1, the Invoice Furnishing Facility (IFF) or GSTR-1A appear in IMS, where recipients can review them before GSTR-2B is generated.

Each record carries one of four statuses:

• Accepted: The record is included in GSTR-2B, and eligible ITC can auto-populate in GSTR-3B.
• Rejected: The record appears in the rejected section of GSTR-2B, and its ITC does not auto-populate in GSTR-3B.
• Pending: The record is held back from GSTR-2B until a subsequent action, subject to applicable time limits.
• No action: The record is deemed accepted when GSTR-2B is generated.

Some records, including those from GSTR-5 and GSTR-6, reverse charge supplies and records requiring ITC reversal under Rule 37A, do not follow the usual supplier-invoice action flow in IMS. However, eligible bills of entry received from ICEGATE now appear in the Import of Goods section of IMS, where taxpayers can take the available actions. Check the relevant IMS section and GSTR-2B treatment for each record type before reconciling ITC.

How do IMS actions flow into GSTR-2B and GSTR-3B?

IMS, GSTR-2B and GSTR-3B work together in the monthly GST filing cycle. For monthly filers, the process is as follows:

1. Your supplier reports a document through GSTR-1, IFF or GSTR-1A, and it appears in your IMS.
2. You accept, reject or keep the record pending, where permitted, or take no action.
3. GSTR-2B is generated automatically on the 14th of the following month.
4. You can change IMS actions after the 14th and recompute GSTR-2B before filing GSTR-3B.
5. Eligible ITC from the final GSTR-2B auto-populates in Table 4 of GSTR-3B.
6. Monthly filers generally must file GSTR-3B by the 20th of the following month.

In its 9 October 2025 clarification, GSTN confirmed that GSTR-2B generation and ITC auto-population remain unchanged. Recomputing GSTR-2B is permitted until GSTR-3B is filed. Generation of the draft GSTR-2B also depends on filing the previous period's GSTR-3B.

QRMP taxpayers can act on eligible records in IMS monthly, but GSTR-2B is generated quarterly. Their GSTR-3B is generally due on the 22nd or 24th of the month following the quarter, depending on the state.

If outward-supply details reported in GSTR-1 are incorrect, check whether they can be corrected through GSTR-1A before filing GSTR-3B for the same period. Confirm the current portal treatment of auto-populated GSTR-3B fields before making a return adjustment. The 57th GST Council has separately recommended a new mechanism for reporting and rectifying liability and ITC in returns, proposed from the April 2027 return.

What happens when you accept, reject or keep a record pending?

Each IMS action affects your ITC and, in some cases, your supplier’s tax liability. The table summarises the impact on invoices and credit notes.

Accepting a record in IMS does not automatically make its ITC eligible. Apply the Section 16 conditions and the Section 17(5) restrictions in force for the relevant tax period. If ineligible ITC auto-populates in GSTR-3B, report the required reversal in the appropriate part of Table 4. The 57th GST Council has recommended relaxing certain Section 17(5) restrictions, but those recommendations should not be treated as current eligibility rules until implemented.

Pending status is available only for specified records and periods. For eligible records, the permitted period is generally one tax period: one month for monthly filers or one quarter for QRMP taxpayers. The applicable deadline depends on the relevant GSTR-2B period and GSTR-3B due date.

How does the new credit note mechanism correct ITC mismatches?

Before October 2025, two gaps caused most credit note mismatches. A credit note could not be kept pending, so you had to accept or reject it in the same month. And when you accepted it, GSTR-2B reversed the full ITC on that credit note. If you had never claimed that ITC, or had already reversed part of it, GSTR-3B showed less ITC than your books.

GSTN’s advisory of 17 October 2025 fixed both gaps. The changes apply from the October 2025 tax period onwards and do not apply to earlier periods.

Which records can now be kept pending?

The pending option now covers four types of records:

• Credit notes and upward amendments of credit notes.
• Downward amendments of a credit note whose original was rejected.
• Downward amendments of an invoice or debit note whose original was accepted and GSTR-3B was filed.
• Downward amendments of e-commerce operator documents under the same conditions.

A monthly filer can hold these for one tax period and a quarterly filer for one quarter. The last date is the GSTR-3B due date of the period after the GSTR-2B period. For example, if your supplier files GSTR-1 on 10 November 2025, the credit note sits in your October 2025 GSTR-2B period. You can keep it pending until 20 December 2025, the due date of the November 2025 GSTR-3B. After that, the pending option is disabled. If you still do nothing, the record is deemed accepted.

How do you declare the ITC to be reduced?

When you accept one of these records, the portal asks, ‘Whether ITC needs to be reduced for the selected record(s)?’ Your answer decides what GSTR-2B reverses.

• Choose ‘No’ if you never claimed the ITC on the original invoice. Nothing is reversed.
• Choose ‘Yes’ without entering an amount to reverse the full ITC on the credit note.
• Choose ‘Yes’ and enter an amount to reverse only part of it.

Remarks are mandatory when you choose ‘No’ or a partial amount. You can also add remarks when you reject a record or keep it pending.

Here is how it works in practice. You buy goods worth ₹1,00,000 plus ₹18,000 GST and claim ₹18,000 as ITC. Half the goods are returned, and the supplier issues a credit note for ₹50,000 plus ₹9,000 GST. You accept it, choose ‘Yes ’, and leave the amount blank, so GSTR-2B reverses ₹9,000. Now take the case where those goods never reached you, and you did not claim the ITC. You accept the credit note, choose ‘No ’, and add a remark, so nothing is reversed. Under the old rule, ₹9,000 would have been reversed on credit you never took.

What if you rejected a record by mistake?

GSTN’s advisory of 19 June 2025 covers this case:

1. Ask your supplier to report the same record, unchanged, in GSTR-1A for the same period or in the amendment table of a later GSTR-1 or IFF. 
2. Accept the re-reported record in IMS and recompute GSTR-2B. 

For a wrongly rejected credit note, the supplier’s liability is added back once on rejection and reduced again on re-reporting, so the net effect on the supplier is nil.

How do you fix an ITC mismatch before filing GSTR-3B?

Most mismatches can be cleared in IMS if you follow the same routine every month:

1. Download your IMS records and match them with your purchase register.
2. Reject records that are not in your books or carry the wrong value, tax rate or GST Identification Number (GSTIN).
3. Tell the supplier why you rejected each record so they can correct it.
4. Keep invoices pending when goods are in transit, or the details are still being checked.
5. Accept or hold each credit note and declare the ITC to be reduced where it applies.
6. Recompute GSTR-2B if you changed any action after the 14th.
7. Compare the ITC that auto-fills Table 4 of GSTR-3B with your books.
8. Report blocked credit in Table 4(B)(1) and temporary reversals in Table 4(B)(2).
9. Add RCM credit yourself, since RCM supplies do not pass through IMS.
10. File GSTR-3B.

Which rules and deadlines still apply to ITC?

IMS controls how ITC reaches GSTR-3B. It does not change the legal conditions for claiming it, and missing these is what usually leads to notices.

• Section 16(4) of the CGST Act sets the last date to claim ITC for an invoice. It is 30 November after the end of the financial year or the date you file the annual return, whichever is earlier.
• Under Rule 37 of the CGST Rules, you must reverse ITC if you do not pay the supplier within 180 days of the invoice date. You can claim it again once you pay.
• Under Rule 37A, if your supplier has not filed GSTR-3B for that period by 30 September after the financial year ends, you have to reverse the ITC by 30 November.
• Under Rule 88D, if the ITC in your GSTR-3B is higher than your GSTR-2B beyond the limit the portal uses, you get an intimation in Form DRC-01C. You have seven days to pay the excess through DRC-03 or explain it. If you do neither, the portal can block your next GSTR-1.

Common mistakes that lead to ITC mismatches

A few habits also cause repeat mismatches:

• Leaving records on no action: Incorrect invoices can slip through as deemed accepted if you do not act on them.
• Acting after the 14th without recomputing GSTR-2B: Your GSTR-3B may not reflect the changes you make to IMS records after this date. 
• Using one credit note for multiple invoices: This makes it hard to calculate the correct ITC reduction. Ask suppliers to issue one credit note per invoice where possible.

Conclusion

Treat the 14th as your working deadline and not the 20th. Clear your IMS actions before GSTR-2B is generated, use the pending option for credit notes you have not verified, and declare the ITC reduction based on what you actually claimed. If anything changes after the 14th, recompute GSTR-2B before you file. The ITC in GSTR-3B will then match your books without manual edits.

This is easier when your purchase records and IMS data sit in one place. TallyPrime lets you download IMS records from the GST portal, reconcile them with your purchase vouchers, set accept, reject or pending status with remarks, upload the actions to the portal and recompute GSTR-2B from within the software.