Invoice Management System (IMS) under GST: Key Dates and Timeline Explained

The Invoice Management System (IMS) under GST is a functionality launched on the GST portal by the Goods and Services Tax Network (GSTN), effective 1 October 2024. The IMS aims to create a communication channel between the recipients and suppliers by implementing an additional layer of document reconciliation and verification. Another objective of the IMS is to simplify the process of amending invoices, reduce errors in claiming input tax credits, and streamline the input tax reconciliation process.

Timeline of IMS Implementation

The IMS was launched on the GST portal as of 1 October 2024. Taxpayers can review the received invoices and other records starting 14 October 2024.

Key Dates for IMS under GST

The key dates relating to the IMS functionality including the communications issued by the GSTN are summarised below:

How IMS Affects GST Filing

A draft Form GSTR-2B becomes available to the recipient on the 14th day of every month. The draft GSTR-2B is populated based on transactions reported by the supplier in Form GSTR-1, Form GSTR-1A, or the IFF. The recipient then has the option to either accept, reject, or keep it pending, as explained below:

• Accept: If a transaction is accepted, the corresponding input tax credit moves to the “ITC Available” section of Form GSTR-2B and auto-populates as an eligible ITC in Form GSTR-3B.
• Reject: If a transaction is rejected, the ITC is transferred to the “ITC Rejected” section of Form GSTR-2B, and consequently, no credit is auto-populated in Form GSTR-3B.
• Pending: If a transaction is left pending, it remains in the IMS and does not appear in Form GSTR-2B. However, it must eventually be accepted or rejected within the deadline specified under Section 16(4) of the Central GST Act. Until that is done, no ITC related to this transaction is auto-populated in Form GSTR-3B. Once the statutory deadline passes, the records are deleted from the IMS.

If the recipient does not take action in the IMS before the generation of Form GSTR-2B, the transaction is treated as accepted by default. Furthermore, in such cases, the corresponding ITC is included as an eligible credit in Form GSTR-3B by default.

Note: 

• It is also important to note that if Form GSTR-3B for the previous period is not filed, the IMS will not generate the draft Form GSTR-2B on the 14th day of the following month.
• Once Form GSTR-2B is generated based on the actions taken by the recipient and Form GSTR-3B is filed for a tax period, any accepted or rejected records for that period are removed from the IMS. Only pending records and those related to future tax periods remain in the IMS.

The IMS has significantly changed how recipient taxpayers interact with invoices. It has also simplified GST compliance by allowing taxpayers to accept, reject, or leave pending invoices. It enables recipients to reconcile their records with those issued by suppliers in GSTR-1, GSTR-1A, or the IFF, thereby ensuring the correct ITC is claimed.

Accepted invoices are automatically imported into the recipient’s Form GSTR-2B. In contrast, rejected invoices are excluded, improving the correctness of ITC claims. IMS has helped businesses simplify their reconciliation process and reduce errors. This upgrade, in the form of IMS, is a significant leap forward, enabling taxpayers to comply with GST filing requirements more efficiently