Resolving Mistakenly Rejected GST Records in IMS

The GST system in India continues to evolve, and the recent introduction of the Invoice Matching System (IMS) is a major step toward smoother and more transparent compliance. But like any automated system, it isn’t immune to human errors.

A common issue faced by businesses is accidentally rejecting valid documents like invoices, debit notes, or credit notes in the IMS. This simple mistake can block your Input Tax Credit (ITC) and even affect your supplier’s tax liability.

You can fix these errors. This blog explains how to do that effectively, without risking compliance delays or ITC losses.

If You Rejected a Valid Invoice or Debit Note After Filing GSTR-3B

Let’s say you mistakenly rejected an invoice or debit note in IMS, but already submitted your GSTR-3B for that tax period. Now you realise that rejecting it was a mistake and that you should have claimed ITC on it. 

Here’s how you can fix it: 

1. Contact your supplier and ask them to re-report the same document without any changes.
2. They can do this in:
   
   • GSTR-1A for the same return period, or
   • The Amendment Table in their GSTR-1 or IFF of a later period.
3. Once the document is again visible to you in IMS, accept it.
4. Go to IMS and recompute your GSTR-2B.

After you follow these steps, the system will restore your ITC for that document. You can then use the updated GSTR-2B to claim the ITC.

Important Note: ITC will only be available in the GSTR-2B for the period in which the corrected document appears.

Will the Supplier’s Tax Liability Increase if They Re-Report the Same Record?

No, it won’t.

Here’s why:

When the supplier re-reports the exact same document (invoice or debit note) after you rejected it by mistake, they are just making it available again for matching, not changing any values.

They can do this in:

• GSTR-1A for the same tax period, or
• The Amendment Table in their GSTR-1/IFF in a future period.

The amendment table works on a delta value basis. This means it only considers any changes in the values reported. Since the supplier is not changing any values, the system recognises that there’s no difference, and no additional tax liability will arise.

So, re-reporting doesn’t increase the supplier’s tax burden in this case.

Reversing ITC When a Valid Credit Note Was Rejected

Rejected a valid Credit Note on IMS by mistake? And already filed GSTR-3B with the original ITC amount?

That means your current books show more ITC than you’re eligible for. You need to reverse it.

Here’s how to do it the right way:

1. Ask your supplier to report the same Credit Note (without any changes) in:
   
   • GSTR-1A of the original return period, or
   • The Amendment Table of a later GSTR-1/IFF.
2. Once the corrected Credit Note is visible in IMS, accept it.
3. Use IMS to recompute your GSTR-2B.

This update will reduce your available ITC by the amount shown in the Credit Note. Your ITC records will now be accurate and compliant.

This is essential to avoid future mismatches or notices from the department.

Impact on the Supplier When a Rejected Credit Note Is Re-Reported

Let’s break this down simply:

• If a valid Credit Note is rejected by the recipient in IMS, the system assumes the Credit Note was never issued. So, the supplier’s liability goes up.
  
  
• Once the supplier re-reports the same Credit Note (in GSTR-1A or amendment table), the system recognises the correction, and the liability goes back down by the same amount.

Bottom line: The net effect is zero, as long as the correction is made properly and on time.

How to Handle Mistaken Rejections in IMS?

Here are a few simple tips to avoid long-term issues due to wrongly rejected records:

• Act quickly. Don’t wait for the year-end to fix errors. As soon as you realise a mistake, reach out to your supplier.
  
  
• Communicate. Work closely with your supplier. They need to re-report the same document for you to fix the rejection.
  
  
• Use IMS features. Always recompute your GSTR-2B after accepting a corrected document.
  
  
• Stay within deadlines. Corrections can only be used to claim or reverse ITC if made within the time limit allowed under GST law.

Conclusion

The Invoice Matching System (IMS) helps streamline GST processes and ensures better control over ITC claims. But like all systems, it depends on correct input and coordination.

If you mistakenly reject a valid document, it doesn’t mean the ITC is gone forever. You just need to follow the right steps: ask your supplier to re-report the record, accept it in IMS, and recompute your GSTR-2B.

This simple process helps both you and your supplier stay compliant and maintain accurate tax records. A little attention now can save you from big issues later.