Advisory on Handling Inadvertently Rejected Records in IMS.

With the implementation of the Invoice Matching System (IMS) and the upcoming changes in GST compliance processes, many taxpayers are encountering queries related to wrongly rejected documents, especially Invoices, Debit Notes, and Credit Notes. This article clarifies the process for availing Input Tax Credit (ITC), handling rejections, and supplier liability.

Q1: How can a recipient avail ITC of wrongly rejected Invoices/Debit Notes/ECO-Documents in IMS if GSTR-3B was already filed for the same period?

Answer:
If a recipient has wrongly rejected a document but has already filed GSTR-3B for that period, they can still avail ITC by following this process:

1. The supplier must re-report the same document (without any modifications) either:
   • In the same period’s GSTR-1A, or
   • In the amendment table of a subsequent GSTR-1/IFF, within the permissible time limit.
2. Once the record is re-furnished, the recipient must:
   • Accept the document on the IMS portal.
   • Recompute GSTR-2B using IMS.

👉 The ITC will then be available in the GSTR-2B of the concerned tax period for the entire value of the amended document, as the original was rejected.

 Q2: What is the impact on the supplier’s liability if a recipient rejects a record that was correctly reported?

Answer:
If a recipient erroneously rejects a valid document (e.g., invoice or debit note), and the supplier re-furnishes it via:

• GSTR-1A for the same tax period, or
• Amendment table of GSTR-1/IFF in any subsequent tax period (within time limits),

Then:

• The supplier’s liability does not increase.
• This is because amendment tables work on a delta value basis—meaning only the difference (in this case, zero) is considered.
• Hence, no additional tax liability is created for the supplier.

Q3: How can a recipient reverse ITC of a wrongly rejected Credit Note in IMS after filing GSTR-3B?

Answer:
To reverse the wrongly availed ITC from a rejected Credit Note (CN), the recipient should:

1. Request the supplier to re-furnish the original CN, without changes:
   • Either in the same period’s GSTR-1A, or
   • In the amendment table of a later GSTR-1/IFF.
2. The recipient then:
   • Accepts the CN on IMS.
   • Recomputes GSTR-2B to reflect the corrected data.

💡 The ITC will then be reduced by the full value of the amended CN, since the original was completely rejected.

Q4: What impact does the re-reporting of a rejected Credit Note have on the supplier’s liability?

Answer:
Initially, when a Credit Note is rejected, the supplier’s liability increases, and it will reflect in the open GSTR-3B.

However, when the supplier:

• Furnishes the same Credit Note again (unchanged), either in the same period’s GSTR-1A or in the amendment table of a later GSTR-1/IFF, within allowed time limits,

Then:

• The supplier’s liability gets reduced again, matching the value of the amended CN.
• As a result, the net effect on the supplier’s liability is neutral, with only one effective tax impact.

📌 Final Takeaway

For smooth compliance under the Invoice Matching System:

• Coordination between supplier and recipient is critical.
• Timely action to correct rejected documents via GSTR-1A or amendment tables ensures that ITC and liability are correctly reflected.
• Use IMS proactively to monitor rejections and take corrective actions before the time limit expires.

Notification Reference: GSTN
19/06/2025