In the Indian GST regime, effective management of GST invoices is one of the most important aspects of ensuring compliance and correct ITC claims. This comprises timely documentation, verification, and reconciliation of invoices by suppliers and recipients, respectively, helping an organisation achieve transparency, reduce errors, and facilitate the timely fulfilment of all statutory filing and reporting requirements.
Latest Changes in GST Invoice Management System
Various important changes have been brought in or are proposed in the IMS to make it more resilient, particularly for the tax period beginning in October 2025.
1. Credit Notes and Amendment Handling
- From October 2025, the IMS will provide recipients with the ability to mark credit notes or other specified records as “Pending” for a limited period of time, which was previously not possible.
- Monthly return filers get one extra month after the tax period, whereas quarterly filers get an extra quarter.
- After the specified “pending” period, the document has to be either accepted or rejected; if not, default actions/liabilities will be applied.
- The recipients can now cancel the amount of ITC for the rejected or marked pending documents.
- Recipients can also add remarks in case of document rejection or in a pending state for better communication between the parties.
2. Impact on Auto-populated Returns and Reconciliations
- Invoices accepted by the IMS are reflected automatically as eligible ITC in the GSTR-2B and GSTR-3B of the recipient.
- Rejected or pending documents might not be eligible for ITC, which can increase the liability of the supplier.
- The IMS is linked to annual returns such as GSTR-9/9C.
3. Simplification & Clarity of Workflows
- Given that taxpayers operate with a considerable volume of invoices, the IMS allows bulk actions like accept/reject/pending rather than processing one by one.
- The recipients can download the list of invoices from the IMS in Excel format, review it offline, and then upload their decisions.
- Invoices are categorised in a more systematic way, based on type (B2B, credit note, amendment) and status (No action, Accepted, Rejected, Pending).
4. Significant Compliance Issues for Businesses
Organisations, whether suppliers or recipients, have to adjust their processes, internal controls, and accounting practices to suit the changes in the IMS. The following are some of the key implications:
For buyers
- The recipients need to go through their IMS dashboard from time to time and decide whether to accept, reject, or leave pending invoices, credit notes, and amendments. Delays could lead to “deemed acceptance” or disqualification for ITC.
- The system allows for internal assessments, such as discrepancies with the purchase record, non-receipt of goods/services, or disputes.
- Reconciliation of the purchase register, goods receipt, supplier invoice, and GST portal records is necessary for ITC eligibility. Internal purchase teams have to ensure that their records are in line with the IMS dashboard.
- If any document is rejected or remains pending beyond the permitted timeframe, the ITC claim will be reversed. The recipients are responsible for this and will see to it that reversal entries are carried out without any undue delay.
- In the case of invoices uploaded by vendors which are not match the recipient’s data, the recipient should discuss with the vendor for amendments/corrections through GSTR-1A or otherwise before the deadline for action as indicated in IMS.
- Enhance procurement/purchasing/finance processes with the addition of IMS review, setting internal cutoffs, escalating discrepancies, and tracking “pending” invoices.
For suppliers
- The suppliers need to ensure that the invoices they upload or submit (through GSTR-1/IFF) are accurate, which includes GSTIN of the recipient, Invoice No., Date, taxable value and tax amount, etc, since the recipients will act upon them through IMS.
- On rejection of the invoice by the buyer, the liability of the supplier would be higher because the buyer would not be able to claim the ITC. The rejections would need to be tracked and communicated with the buyers in case of any reconciliation or discrepancy.
- Suppliers should immediately issue credit notes / amendments when asked for, and correctly report the same in GSTR-1A so that recipients can reflect or act in IMS. This involves follow-up with the buyers to ensure they have received and processed the invoice correctly, to avoid any rejections or pending status.
5. System / ERP / Accountancy Impact
- Companies have to integrate with their ERP / accounting systems so the invoice data generated internally matches what is uploaded onto GSTN and appears on IMS dashboards.
- Reporting and dashboards should include “Invoices pending/rejected/accepted” statuses, so Finance/Tax teams have visibility and can act before the statutory deadlines.
- Annual returns and other reconciliations, such as GSTR-9/9C, depend upon correct ITC and outward supply data, and IMS provides an additional check for such.
6. Immediate Steps for Companies
To ensure compliance and build a better score under the new IMS framework, businesses should take the following steps with immediate effect:
- Review existing processes.
- Outline the workflow from PO to receipt of material/services, supplier invoice, GST upload, and IMS dashboard of the recipient
- Assess who reviews the IMS dashboard, frequency, and internal cut-off deadlines
- Fix internal cut-offs.
- Set an internal cut-off period (say, 7-10 days from the date of bill submission) for acceptance, rejection, or pending of bills
- Provide an escalation for invoices not processed
- Ensure the supplier uploads the outbound invoice on or before the 11th of the subsequent month for GSTR-1 and coordinates with purchasers in case discrepancies are found. 3. Reconcile proactively.
- At the end of the month or quarter, at the end of every quarter, the business should reconcile the internal purchase register to the IMS dashboard to ensure all incoming bills are either accepted or marked pending/rejected
- Identify mismatched records of invoices that have not been matched due to missing invoices, incorrect supplier GSTIN, incorrect tax amount, etc., and take up with suppliers for correction.
- Monitor credit notes and adjustments.
- Verify that credit notes/amendments of suppliers flow correctly in IMS, and the recipient takes action before the pending period is closed
- The recipient needs to check the credit-note dashboard and decide to accept (reducing ITC), reject (will give no ITC), or leave pending.
- Update policies and train personnel.
- Ensure that F/T/P teams are well aware of IMS functionality, timelines for taking action, consequences of pending/rejection, and impact on ITC claim credit
7. Monitor Annual Returns and Reconciliations
- Ensure that the decisions and statuses in IMS are in alignment with GSTR-2B, since table 8A of GSTR-9 is an annual return, and these will reflect the invoices reported in GSTR-2B.
- Non-alignment may trigger notices/ liabilities, such as an invoice accepted but not reflected in 2B or rejected and yet ITC claims it.
Benefits and Challenges
Benefits
- Real-time visibility to the recipient helps confirm supplier uploads before claiming ITC.
- Increased coordination and transparency between suppliers and recipients have resulted in a reduction in discrepancies related to ITC claims and associated show-cause notices.
- Record the Accept/Reject/Pending decisions that will be helpful for auditing and compliance.
- Improved supplier discipline by incentivising suppliers to correctly report outward supply data that buyers rely on for claiming ITC.
Challenges
- The examination of invoices and credit notes might be very time-consuming, given the large volumes. The “bulk actions” should help, but process discipline needs to be upheld.
- There is a need for coordination between procurement, tax, finance, and supplier management to prevent pending invoices and delays in ITC claims.
- Ensure system readiness through proper configuration of internal systems/ERP, workflow updating, and training of personnel.
Other GST Compliance Changes Interfacing with IMS
While this is a major development, especially for invoice/ITC management, there are some other complementary changes in the GST ecosystem:
- Thresholds and the timeline for mandatory e-invoicing have been further strengthened. From April 1, 2025, the uploading of e-invoices to the Invoice Registration Portal would be required for taxpayers with AATO of ₹10 crore and above within 30 days from the date of invoice.
- From July 2025, the auto-populated obligation in GSTR-3B, Table 3, will not be editable. Similarly, the time-bar rules for filing returns beyond three years are also in place.
- Revision in the reporting of annual returns, including the new Table 6A1 and auto-population of GSTR-9/9C based on GSTR-2B/IMS, is already in place. This listing on GST rates, such as those effected in September 2025, would impact the value of the invoice, computation of tax, and ITC.
Tips for Businesses
- Verify that all the supplier invoices are represented in your IMS dashboard. If some are not, identify those and arrange with the supplier to upload/amend.
- Immediately take necessary action on “pending” bills within the available time – monthly or quarterly – or you will lose ITC.
- While rejecting an invoice or credit note, use the notes option and record the reason, which will become part of the audit trail and help you defend yourself.
- Define roles & responsibilities for IMS review: who checks the dashboard when, who follows up with suppliers.
- Reconciliation of the purchase register vs IMS vs GSTR-2B should form part of the month-end/quarter-end activity.
- Monitor the impact of IMS decisions on annual return disclosures (GSTR-9/9C), particularly Table 8A and all values derived from GSTR-2B.
Conclusion
The new GST Invoice Management System is a big step towards increased transparency, accuracy, and accountability in the reconciliation of invoices and ITC claims. It enforces timely verification and prevents mismatches that enhance compliance, reduce disputes, and promote better coordination between suppliers and recipients in the GST ecosystem.
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