Businesses often face issues in reconciling Input Tax Credit (ITC) due to mistakenly rejected records on the Invoice Matching System (IMS). Whether it’s an invoice, debit note, or credit note, incorrect rejections can disrupt the seamless flow of ITC. Here’s a practical guide to help both recipients and suppliers handle such rejections effectively.
1. How can a recipient avail ITC of wrongly rejected invoices, debit notes, or ECO-documents if GSTR-3B has already been filed?
If a recipient has mistakenly rejected any document on IMS and already filed GSTR-3B for the same period, they can:
- Request the supplier to re-report the exact same record without any changes.
- The supplier can do this through:
- GSTR-1A of the same return period, or
- The amendment table of a subsequent GSTR-1/IFF.
Once this is done, the recipient can:
- Accept the amended document on IMS.
- Recompute GSTR-2B on IMS.
- Avail full ITC on the amended record, as the original was entirely rejected.
⚠️ ITC can only be claimed in the GSTR-2B of the relevant tax period in which the amended document appears.
2. What is the impact on supplier’s liability if a rejected document is re-furnished?
When a supplier re-furnishes the same document:
- Through GSTR-1A or the amendment table (till the allowed time limit),
- There will be no additional liability for the supplier.
Why?
Because amendment tables record delta (difference) values only. So, if the original and amended values are the same, the net liability impact is zero.
3. How should a recipient reverse ITC of a wrongly rejected credit note in IMS after filing GSTR-3B?
In this case, the recipient should:
- Ask the supplier to re-report the same credit note:
- In GSTR-1A of the same period, or
- In the amendment table of a later GSTR-1/IFF return.
Then:
- Accept the re-furnished credit note on IMS.
- Recompute GSTR-2B to reflect the reversal of ITC.
The recipient’s ITC will be reduced by the full value of the original credit note.
4. What impact does re-reporting a rejected credit note have on the supplier’s tax liability?
Initially, once the recipient rejects the credit note, the supplier’s liability increases in the open GSTR-3B return.
However, when the supplier furnishes the same credit note again (via GSTR-1A or amendment table), the liability gets reduced by the same amount.
🧾 Net effect: The supplier’s liability is increased and then reduced, balancing it out—no double tax burden.
Final Thoughts
Mistakes happen, but GST systems like IMS allow room for correction. By coordinating between recipients and suppliers and using GSTR-1A or amendment tables, inadvertent rejections can be rectified without financial loss.
Key Tip: Always track rejected records through your IMS dashboard and take timely action before statutory deadlines.
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This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.
Published on: June 21, 2025