How to Claim ITC and Report in GSTR-3B from October 2025?

The way businesses claim Input Tax Credit (ITC) in GST returns has changed from October 2025. Until now, ITC from GSTR-2B was automatically pulled into Table 4 of GSTR-3B, making the process mostly system-driven. But with the introduction of the Invoice Management System (IMS) under GST 2.0, this auto-population is being replaced by a manual, action-based approach.

Starting October 2025, every taxpayer will need to review, accept, or reject supplier invoices in IMS before the credit shows up in GSTR-2B and can later be reported in GSTR-3B. This shift makes taxpayers directly responsible for verifying their claims, ensuring only genuine ITC is reported.

What has changed in ITC reporting?

Here are the most important updates every business must know:

• Invoice action is compulsory – Each supplier invoice must be accepted, rejected, or kept pending in IMS. Only the “accepted” ones will be available for ITC.
• No auto-transfer of ITC – Table 4 of GSTR-3B will not pick up ITC automatically from GSTR-2B anymore.
• GSTR-2B depends on your actions – It is generated only after you complete the invoice review in IMS.
• Pending invoices have a deadline – You can keep an invoice pending for one filing cycle. If you don’t act later, it may be treated as accepted.
• Stricter reconciliation – Businesses now need to check their purchase register against both IMS and GSTR-2B before filing.

Step-by-step guide to claiming ITC and reporting in GSTR-3B

Step 1: Open IMS on the GST portal

• Log in to GST portal.
• Go to Services > Returns > Invoice Management System (IMS).
• Click on Inward Supplies to view invoices, debit notes, and credit notes uploaded by suppliers.

Step 2: Take action on invoices

For every entry listed in IMS, choose one of the following:

• Accept → If the invoice is valid and eligible for ITC.
• Reject → If the invoice is wrong or unrelated.
• Pending → To review later, but only for one tax period.

Step 3: Generate your GSTR-2B

• Once you finish reviewing invoices, click Compute GSTR-2B.
• The portal will create your GSTR-2B for that tax period based on accepted invoices.

Step 4: Report ITC in GSTR-3B (Table 4)

• Open GSTR-3B from the Returns Dashboard for the chosen tax period.
• Table 4 is where ITC needs to be reported:
  • 4(A): Eligible ITC → Pulled from your final GSTR-2B.
  • 4(B): ITC reversals →
    • 4(B)(1): Permanent reversals (e.g., blocked credits under Sec 17(5)).
    • 4(B)(2): Temporary reversals (e.g., unpaid invoices beyond 180 days).
  • 4(C): Net ITC → Auto-calculated after reversals.

Step 5: File GSTR-3B

• Take action on supplier invoices in IMS up to the 13th of the month to generate your GSTR-2B. Any actions after this date but before filing require clicking “Recompute” to update GSTR-2B. Once generated, the eligible ITC from GSTR-2B flows into GSTR-3B, allowing you to review, reconcile, and file accurately.
• Adjust your tax liability using ITC from the Electronic Credit Ledger.
• Pay any shortfall in cash.
• File the return—after submission, changes cannot be made for that period.

IMS with TallyPrime: Smarter ITC, seamless compliance

TallyPrime’s Invoice Management System (IMS) is a connected GST solution that ensures you claim the right ITC at the right time. With real-time invoice visibility, instant reconciliation, and action-based controls, it eliminates last-minute mismatches and reduces compliance stress.

Key Benefits of using IMS in TallyPrime

• Real-time visibility: See supplier invoices as soon as they’re uploaded—no waiting till GSTR-2B.
• Action-based control: Accept, Reject, or keep invoices Pending for clarity and accuracy.
• Auto-reconciliation: Match supplier invoices with purchase records in one click.
• Bulk actions: Handle hundreds of invoices at scale—beyond the GST portal’s 500 limit.
• Complete tracking: Single-view summary for pending, accepted, and rejected invoices.
• Deemed acceptance: Flexibility where explicit action isn’t needed.
• Predictable ITC & cash flow: Timely actions mean fewer reversals, smoother audits, and reliable compliance.

In short, using IMS in TallyPrime simplifies GST return filing, keeps your ITC accurate, and gives you unmatched control over compliance—all within your accounting system.

Why this matters for businesses

• Higher compliance load – The system shifts the responsibility to taxpayers to verify ITC.
• Risk of mismatches – Not reconciling properly could lead to reversals, penalties, or interest.
• Better accuracy – Double-checking ensures that only valid credits enter your books.

Conclusion

From October 2025, the auto-populated ITC is discontinued, and businesses must adopt a more hands-on approach. By actively managing invoices in IMS, reconciling data carefully, and ensuring timely action, you can claim ITC confidently and avoid compliance risks.

Early preparation, staff training, and a robust reconciliation process will make this transition smoother and help your business stay GST-compliant in the new regime.