GST IMS Is Now Mandatory (April 2026): The Deemed-Acceptance Trap That Decides Your ITC
From 1 April 2026 the Invoice Management System (IMS) is mandatory for all regular GSTR-3B filers, and Section 38 ties your ITC to accepted invoices. Inaction now equals acceptance — here is how IMS works and how to avoid the costly mistakes.
- IMS became mandatory for all regular GSTR-3B filers from 1 April 2026; composition taxpayers are exempt.
- Inaction equals deemed acceptance — an unreviewed invoice auto-flows into GSTR-2B as available ITC.
- Section 38 of the CGST Act, substituted by Notification 16/2025-CT dated 17 September 2025, now legally ties ITC to accepted IMS records.
- Rejecting a credit note is not harmless — under new Rule 67B it raises your supplier's output liability.
The most dangerous word in your GST compliance this year is "nothing" — because doing nothing on the Invoice Management System (IMS) now counts as acceptance. From 1 April 2026, IMS became mandatory for every regular GST taxpayer who files GSTR-3B, and your Input Tax Credit (ITC) is now legally tied to the invoices you accept there (ClearTax, 2026). Section 38 of the CGST Act was substituted to make this the statutory basis for ITC — so IMS is no longer optional housekeeping.
What is the Invoice Management System (IMS)?
IMS is a recipient-side dashboard on the GST portal that lets you Accept, Reject, or keep Pending each invoice, debit note, or credit note your supplier files in GSTR-1, GSTR-1A, or the IFF — before your GSTR-2B is generated (GSTN advisory, 2025). Accepted records become "ITC Available" and auto-populate GSTR-3B; rejected records are excluded; pending records stay off GSTR-2B until you act. It went live in October 2024 and became mandatory from 1 April 2026.
Why does inaction count as acceptance?
Because the system treats no action as a deemed accept. If you never touch an invoice in IMS, it flows into your GSTR-2B as available ITC by default (ClearTax, 2026). That is convenient until a supplier files a fake or wrong invoice against your GSTIN — if you do not reject it, it becomes your claimed ITC, and the mismatch is your problem during scrutiny. Monthly review is now a defensive necessity, not a nicety.
What changed legally — and from when?
The teeth came from Notification 16/2025-Central Tax dated 17 September 2025, which substituted Section 38 of the CGST Act, 2017 so that ITC is legally tied to accepted IMS records (ClearTax, 2026). From the October 2025 tax period, the "Pending" status for credit notes can be held for only one tax period (one month for monthly filers, one quarter for QRMP), after which you must Accept or Reject or it is deemed accepted. A new "Import of Goods" section also brings Bill of Entry data into IMS.
Why is rejecting a credit note risky?
Treating Reject as a routine clean-up tool is costly. Rejecting a credit note blocks the related ITC for that period and, under the new Rule 67B inserted by Notification 18/2025-CT dated 31 October 2025, increases your supplier's output liability in their subsequent GSTR-3B (ClearTax, 2026). That strains the supplier relationship and invites reconciliation disputes. Reject only when the document is genuinely wrong, not as a default.
Frequently Asked Questions
Is IMS mandatory for my business?
Yes, if you are a regular GST-registered taxpayer who files GSTR-3B — IMS became mandatory from 1 April 2026. Composition-scheme taxpayers are not required to use it. If you claim ITC, you must now manage inward invoices through IMS because your ITC is tied to the records you accept there.
What happens if I do not take any action in IMS?
Inaction is treated as acceptance. Any invoice you leave untouched flows into your GSTR-2B as available ITC by default. The risk is that a fake or incorrect invoice filed against your GSTIN becomes your claimed credit unless you actively reject it, so monthly review before GSTR-2B generation is essential.
How long can I keep an invoice "Pending"?
For most records you can hold Pending until you decide, but from the October 2025 tax period credit notes and their downward amendments can stay Pending for only one tax period — one month for monthly filers, one quarter for QRMP filers. After that you must Accept or Reject, or the system deems it accepted.
Should I reject every invoice I am unsure about?
No. Rejection blocks ITC for the period, and for credit notes it raises your supplier's output liability under Rule 67B, creating disputes. Use Reject only for genuinely wrong documents. For invoices you cannot yet verify, keep them Pending and chase the supplier rather than rejecting reflexively.
What should you do next?
Set a fixed monthly IMS review date before GSTR-2B generation, train whoever handles accounts payable to Accept/Reject deliberately, and flag any expected supplier invoice not yet visible. For end-to-end help, see Bizeract monthly GST return filing and our 2025 GST portal changes guide, which covers IMS alongside MFA, ISD and the GSTR-3B lock.
What to verify before acting on GST IMS Is Now Mandatory
Rules and platform behaviour change after an article is published. Confirm thresholds, registration status, return forms, document rules, and portal notices against the GST Portal before you act on anything below, because the right answer depends on your entity, state, turnover, and current setup.
Going deeper: GST Return Filing, E-Invoice Registration, and GST Registration.
Frequently asked questions
Is IMS mandatory for my business?
Yes, if you are a regular GST-registered taxpayer who files GSTR-3B — IMS became mandatory from 1 April 2026. Composition-scheme taxpayers are not required to use it. If you claim ITC, you must now manage inward invoices through IMS because your ITC is tied to the records you accept there.
What happens if I do not take any action in IMS?
Inaction is treated as acceptance. Any invoice you leave untouched flows into your GSTR-2B as available ITC by default. The risk is that a fake or incorrect invoice filed against your GSTIN becomes your claimed credit unless you actively reject it, so monthly review before GSTR-2B generation is essential.
How long can I keep an invoice "Pending"?
For most records you can hold Pending until you decide, but from the October 2025 tax period credit notes and their downward amendments can stay Pending for only one tax period — one month for monthly filers, one quarter for QRMP filers. After that you must Accept or Reject, or the system deems it accepted.
Should I reject every invoice I am unsure about?
No. Rejection blocks ITC for the period, and for credit notes it raises your supplier's output liability under Rule 67B, creating disputes. Use Reject only for genuinely wrong documents. For invoices you cannot yet verify, keep them Pending and chase the supplier rather than rejecting reflexively.
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