IMS Deemed Acceptance & Credit-Note Mismatches

In short

• What IMS is. The Invoice Management System (IMS) on the GST portal lists every invoice, debit note and credit note your suppliers report. You can accept a document, reject it, or keep it pending.
• Deemed acceptance. A document you take no action on is deemed accepted when your GSTR-2B is generated.
  • An accepted invoice gives you input tax credit (ITC).
  • An accepted credit note reduces your ITC.
• Credit notes, from the October 2025 tax period.
  • You can keep a credit note pending, but only for a limited time.
  • When you accept one, you can declare how much ITC you actually reverse. If you declare a partial reversal or none, you must add a remark.
• The seller's side. A supplier's tax is reduced by a credit note only if you, the buyer, have reversed the matching ITC. This is the proviso to section 34(2) of the CGST Act, as amended by the Finance Act, 2025.
• When it goes wrong. The usual results are:
  • ITC reversed twice, or not at all;
  • a DRC-01C intimation;
  • a supplier asking why you rejected their credit note.

How IMS works

• Your actions decide GSTR-2B. Each month, the documents you accept and the ones deemed accepted flow into your GSTR-2B. GSTR-2B then fills in the ITC section of your GSTR-3B. Rejected documents are kept out. Pending documents are held back for a later month.
• Credit notes from suppliers. Accepting one, or letting it be deemed accepted, reduces your ITC in GSTR-2B.
• Credit notes you issue. If your buyer rejects your credit note, your GSTR-3B liability is not reduced by it. You must then settle the matter with the buyer or reverse the credit note.
• How long a credit note can stay pending. It is limited to one tax period: one month for monthly filers, and one quarter for quarterly filers. After that it is deemed accepted.
• Declaring a reversal. When you accept a credit note, you can state the ITC you actually reverse:
  • full, where you had claimed the ITC on the original invoice;
  • partial or nil, where you had not claimed it, or had already reversed it. A remark is required for partial or nil reversal.

The last date to claim missed ITC, or to declare a credit note for a year, is set by section 16(4) and section 34(2). The rule this site uses is in the box below.

Why ecommerce brands get caught

• Credit notes for returns. Your quick-commerce and B2B buyers, such as distributors and retailers, receive credit notes from you for returns, rate differences and schemes. If they reject them, your output tax stays high.
• Credit notes from your own suppliers. Your 3PL and packaging vendors issue credit notes too. If you take no action, they are deemed accepted and your ITC falls, even if you had already reversed that ITC in your books or in GSTR-3B.
• Commercial credit notes. Credit notes issued without GST, for purely commercial adjustments, do not appear on IMS. Mixing them with GST credit notes muddles the reconciliation.
• Invoices that are not yours. Supplier errors left without action are deemed accepted. You then claim ITC you are not entitled to.
• Prior-year documents. Invoices and credit notes that arrive on IMS late, near or after the last date, are claimed or declared in the wrong period.

Step-by-step: when IMS figures do not match your books

1. Download the IMS view and GSTR-2B. For the period, download the IMS view with your actions, and the GSTR-2B.
2. Match them to your purchase register and credit-note register, document by document.
3. For each credit note from a supplier:
   • You had claimed the ITC on the original invoice. Accept the credit note with a full reversal.
   • You had not claimed that ITC, or reversed it already. Accept with a partial or nil reversal, and add a remark that gives the facts.
   • The credit note is wrong. Reject it, and tell the supplier why.
4. For each invoice:
   • Yours and correct: accept it.
   • Not yours, or wrong: reject it.
   • Correct but for a later period: keep it pending, within the limit for pending invoices.
5. For credit notes you issued that your buyers rejected, contact each buyer. Agree whether to reissue the credit note or reverse it. Remember that your output tax is reduced only if the buyer reverses the ITC.
6. Recompute before filing GSTR-3B. Check the ITC that GSTR-2B gives you against your books before filing. That avoids a DRC-01C intimation for the period.

Documents to gather

• The IMS view with your actions and the timestamps, plus GSTR-2B for each period.
• The purchase and credit-note registers, showing which original invoice each credit note relates to.
• GSTR-3B for the months when the original ITC was claimed and when it was reversed.
• Correspondence with suppliers and buyers about rejected documents.

If a notice follows

• ITC claimed above GSTR-2B. This can lead to a DRC-01C intimation (see that guide) or a scrutiny notice. Use the IMS records to explain the timing.
• A buyer rejected your credit notes. Your liability stays as reported. If your GSTR-3B wrongly took the reduction, expect a DRC-01B or a scrutiny point.
• What to show in either case. Your reconciliation should show each document, the action taken, the ITC claimed or reversed, and the period.

Common mistakes

• Leaving everything to deemed acceptance. Supplier errors and wrong credit notes then flow straight into your ITC.
• Reversing ITC twice. For example, once manually in GSTR-3B and again when the credit note is deemed accepted.
• Rejecting a correct credit note to keep your ITC. The supplier's liability rises, and the dispute surfaces in their records and later in yours.
• Missing the last date for prior-year credit notes and missed invoices. The last date is in the box below.

Preventing it next time

• Act on IMS every month before GSTR-2B is generated. Do not rely on deemed acceptance.
• Link each credit note to its original invoice in your books, so you know at once whether ITC was claimed on it.
• Agree a credit-note process with your large B2B buyers and suppliers. It should cover who issues the credit note, when, and when the matching ITC is reversed.
• Track documents that are pending or missing. The IMS & ITC planner below helps, and also tracks the last date for each financial year.

When to take professional help

Take help when:

• credit notes across a year have been handled inconsistently;
• a large buyer disputes many credit notes;
• an intimation or notice cites ITC differences tied to IMS actions.

The fix often spans several periods and both sides of the transaction.