“Pending” Option & ITC Reversal Feature Added in GST IMS

A new functionality has been rolled out in the Invoice Management System (IMS) on the GST portal, bringing greater flexibility for taxpayers. The enhancement allows taxpayers to mark Credit Notes as “Pending” for one tax period and modify their Input Tax Credit (ITC) reversal upon acceptance of such notes.
This update is aimed at resolving reconciliation mismatches and easing disputes between buyers and suppliers regarding credit note acknowledgment and ITC adjustments.

Below are some FAQs to help taxpayers understand the newly introduced features in IMS effective from the October 2025 tax period.

FAQ on New Changes in Invoice Management System (IMS) from October 2025 Tax Period

1. For which documents has the “Pending” option been introduced now?

The “Pending” option has now been extended to cover the following document types:

a. Credit Notes or upward amendments of Credit Notes
b. Downward amendment of Credit Notes where the original CN was rejected
c. Downward amendment of Invoice/Debit Note where the original Invoice was already accepted and GSTR-3B filed
d. E-commerce operator (ECO) document downward amendments where the original entry was accepted and GSTR-3B filed

2. What are the new features introduced in IMS?

The following functionalities have been added to the IMS from October 2025 onwards:

1. Option to keep the above-specified records as Pending for one tax period
   
   
2. Facility to declare ITC amount to be reduced by recipient taxpayers in case of accepted records like CNs or amendments
   
   
3. Ability for recipients to add remarks while taking ‘Reject’ or ‘Pending’ action

3. Are these changes applicable prospectively or retrospectively?

The changes are prospective and applicable from the October 2025 tax period onwards.

Illustrative examples:

• Example 1: CN dated 15 Sept 2025, reported in GSTR-1 for Sept 2025 (filed on 11 Oct 2025) → No Pending Option available
  
  
• Example 2: CN dated 15 Oct 2025, reported in GSTR-1 for Oct 2025 (filed on 11 Nov 2025) → Pending Option available
  
  
• Example 3: CN dated 15 Mar 2025, reported in GSTR-1 for Oct 2025 (filed on 11 Nov 2025) → Pending Option available since GSTR-2B period is Oct 2025
  
  
• Example 4: CN dated 20 Sept 2025, reported in GSTR-1A for Sept 2025 (filed on 14 Oct 2025) → Pending Option available since GSTR-2B period is Oct 2025

4. For how long can Credit Notes and other records be kept in “Pending” status?

The duration to keep documents in Pending status depends on the taxpayer’s filing frequency:

• Monthly taxpayer: 1 tax period (1 month)
  
  
• Quarterly taxpayer: 1 tax period (1 quarter)

Formula:
Due date of GSTR-3B filing of [Applicable GSTR-2B period + 1 tax period]

Example (Monthly):
If GSTR-1 filed on 10 Nov 2025, CNs reported can be kept pending till:

• Applicable GSTR-2B period: Oct 2025
  
  
• Specified period: 1 month (Nov 2025)
  
  
• Due date of GSTR-3B for Nov 2025: 20 Dec 2025

Example (Quarterly):
If GSTR-1 for Oct–Dec 2025 filed on 10 Jan 2026, CNs can be kept pending till:

• Applicable GSTR-2B period: Oct–Dec 2025
  
  
• Specified period: 1 quarter (Jan–Mar 2026)
  
  
• Due date of GSTR-3B for Jan–Mar 2026: 22nd/24th April 2026

5. What happens once the permitted “Pending” period expires?

After the expiry of the allowed period, the Pending option will be disabled.
The taxpayer must Accept or Reject the record thereafter.
If no action is taken by the due date, the system will automatically mark such records as Deemed Accepted.

6. Can taxpayers declare the amount of ITC to be reversed?

Yes.

Earlier, upon accepting a Credit Note, the system used to automatically reverse the full ITC in GSTR-2B, even if the taxpayer had not availed or had already partially reversed it.

From October 2025 onwards, the recipient taxpayer can now declare the ITC amount to be reversed at the time of accepting such records.

A prompt will appear on-screen asking:

“Whether ITC needs to be reduced for the selected record(s)?”

The taxpayer can choose between:

• Yes – to reverse full or partial ITC
  
  
• No – if ITC was not availed earlier and therefore no ITC reversal is required
  

If Yes is selected, the recipient can further declare the ITC amount (for partial reversals).
If no amount is declared, the system assumes full ITC reversal.
These adjustments will then auto-reflect in GSTR-2B and consequently in GSTR-3B.

7. Can remarks be added while taking Reject or Pending action?

Yes.

Taxpayers can now add remarks while marking any record as Reject or Pending.
Remarks are mandatory in cases where partial or no reversal is declared.

Conclusion

The newly added “Pending” option and ITC reversal declaration facility in IMS is a significant step towards smoother reconciliation and transparency in GST return filing. It empowers taxpayers to exercise control over ITC reversals and manage disputes related to credit notes more effectively.With these changes, the IMS under GST is evolving into a more dynamic and taxpayer-friendly system, ensuring seamless compliance and accurate ITC reporting.