Reclaim Your GST ITC for Rejected Invoices & Credit Notes | IMS Latest Update

With the implementation of the Input Services Matching (IMS) functionality under GST, taxpayers now have better control and visibility over their Input Tax Credit (ITC). However, challenges arise when records are inadvertently rejected on IMS. This article addresses key queries and solutions regarding wrongly rejected documents such as Invoices, Debit Notes, ECO-documents, and Credit Notes.

📌 Question 1:

How can a recipient avail ITC of wrongly rejected Invoices/Debit notes/ECO-Documents in IMS when GSTR-3B of the same period has already been filed?

✅ Solution:
The recipient should request the supplier to report the same document (unchanged) in:

• GSTR-1A of the same return period, or
• Amendment table of GSTR-1/IFF of a subsequent period.

Once this is done, the recipient can accept the amended record on IMS and recompute GSTR-2B, thereby becoming eligible to claim full ITC of the re-reported record.

🧾 Note: ITC will only reflect in the GSTR-2B of the concerned tax period in which the record is furnished again.

📌 Question 2:

If an original record is wrongly rejected by the recipient and is re-furnished by the supplier, what will be the impact on the supplier’s liability?

✅ Clarification:
If the same value is re-furnished in:

• GSTR-1A of the same period, or
• Amendment table of a future GSTR-1/IFF,

Then the supplier’s liability will not increase, since the amendment reflects only the delta value (i.e., the net change, which is zero in this case). Thus, there is no additional tax liability on the supplier.

📌 Question 3:

How can a recipient reverse ITC of a wrongly rejected Credit Note in IMS if GSTR-3B is already filed?

✅ Solution:
The recipient should request the supplier to re-furnish the same Credit Note (unchanged) either in:

• GSTR-1A of the same return period, or
• Amendment table of subsequent GSTR-1/IFF.

Upon accepting the CN on IMS and recomputing GSTR-2B, the recipient’s ITC will get reduced by the entire value of the CN.

📌 Question 4:

What is the supplier’s liability if a rejected Credit Note is re-furnished?

✅ Clarification:
Initially, the supplier’s liability increases due to rejection of the CN.
However, once the same CN is re-furnished, the liability gets reduced again, ensuring that the net liability effect is only once.

📌 Summary Table

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