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🔍 IMS — GST Reference Notes

IndIaTaxSim · indiataxsim.com · Free Study Materials · For educational use only

1. What is IMS (Invoice Management System)?

IMS was introduced in October 2024 as a buyer-side dashboard that gives registered taxpayers control over invoices uploaded by their suppliers in GSTR-1. Before IMS, all supplier invoices auto-populated into GSTR-2B without any buyer review. IMS adds a verification layer.

ℹ️ Note

IMS is available to all registered taxpayers as buyers. You need not be a large company — even a small business can use IMS to review invoices from its suppliers.

2. Three IMS Actions — Detailed Explanation

Action	What Happens	Impact on GSTR-2B	When to Use
Accept	Invoice is confirmed as correct	Invoice INCLUDED in GSTR-2B — full ITC available	Goods/services received, invoice correct
Reject	Invoice is disputed and removed	Invoice EXCLUDED from GSTR-2B — no ITC	Wrong GSTIN, not received, duplicate, wrong amount
Pend	Defer decision to next period	Invoice stays in IMS pending queue	Goods in transit, dispute being resolved, pending verification

If no action is taken before GSTR-2B generation, the invoice is auto-accepted (default is Accept).

3. When Should You Reject an Invoice?

Reason for Rejection	Explanation
Goods not received	Supplier uploaded invoice but goods are still in transit or were never dispatched
Duplicate invoice	Same supply invoiced twice by the supplier
Incorrect GSTIN	Supplier entered wrong buyer GSTIN — your GSTIN should not be on this invoice
Wrong taxable value	Quantity or price is different from what was agreed
Invoice already credited via credit note	The supplier has already issued a credit note but the original invoice is still showing
Supplier is ineligible (e.g., cancelled GSTIN)	ITC from a cancelled GSTIN is not available

4. GSTR-2B Regeneration After IMS Actions

GSTR-2B is generated on the 14th of each month. The sequence is:

•Suppliers file GSTR-1 by 11th (or 13th for QRMP)

•You take IMS action (Accept / Reject / Pend) between 1st–14th

•GSTR-2B is auto-generated on 14th incorporating only ACCEPTED invoices

•Rejected invoices appear in a separate "Rejected" section of GSTR-2B (for your records)

•Pending invoices carry forward to next month's IMS for action

5. ITC Reduction Under IMS

For accepted invoices where ITC needs to be reduced (e.g., goods partially returned, partial use):

•Column: "Whether ITC to be reduced" — select YES

•Column: "Amount declared for ITC reduction" — enter the amount (IGST / State tax / UT tax)

•Column: "Remarks by Recipient" — optional note to supplier

ℹ️ Note

"Remarks" column shows "No remarks Available" in the system if the recipient has not added any remark. Clicking "Remark" hyperlink allows the recipient to add a note visible to the supplier.

6. IMS Deadlines

Action	Deadline
Take action on an invoice	Before 14th of the following month (when GSTR-2B is generated)
Change action (e.g., Reject → Accept)	Before GSTR-2B generation — after GSTR-2B is generated, actions are frozen for that period
Supplier re-uploads corrected invoice	Supplier files GSTR-1A; invoice appears in next IMS cycle

❓ Problem

Meena Pharma received an invoice from Supplier X for ₹3,00,000 of medicines in November. They accepted the invoice in IMS. Later in December they realise only ₹2,00,000 worth of goods were actually received. GSTR-2B for November has already been generated. What should Meena Pharma do?

✅ Solution

GSTR-2B for November is already generated — IMS action cannot be changed for November. Meena Pharma has two options:

1. Request Supplier X to issue a Credit Note for ₹1,00,000 — this will appear in next month's GSTR-2B reducing ITC.

2. Meena Pharma voluntarily reverses ₹1,00,000 worth of ITC in their GSTR-3B Section 4(B)(2) for the November filing.

The safest approach is to do both — request a credit note AND reverse the excess ITC immediately.

❓ Problem

A buyer receives an invoice from Supplier Y for ₹5,00,000 (taxable) in their IMS. The buyer knows the supply is genuine but the GSTIN on the invoice is incorrect (supplier put a different GSTIN). What should the buyer do?

✅ Solution

The buyer should REJECT the invoice in IMS. Since the GSTIN is wrong, the ITC technically belongs to a different GSTIN. After rejection, the supplier is notified. The supplier should cancel the invoice (or issue a credit note to the wrong GSTIN) and re-issue a fresh invoice with the correct buyer GSTIN. The fresh invoice will appear in the correct buyer's GSTR-2B after the supplier files it in the next GSTR-1 filing cycle.

✏️ MCQ Practice — 50 Questions

1.IMS stands for:
(A) Invoice Management System (B) Input Matching System (C) Invoice Monitoring Service (D) ITC Management Screen

2.IMS allows a buyer (recipient) to:
(A) Upload their own invoices (B) Accept, Reject, or Pend invoices uploaded by suppliers in GSTR-1 (C) File GSTR-1 on behalf of supplier (D) Cancel supplier's registration

3.The three actions available in IMS for each invoice are:
(A) Accept, Hold, Dispute (B) Accept, Reject, Pending (C) Approve, Decline, Defer (D) Match, Mismatch, Verify

4.The default action in IMS when a buyer takes NO action on an invoice is:
(A) Reject (B) Pending (Deemed Accepted) (C) Accept (D) Hold for review

5.IMS was introduced to replace the earlier provisional ITC mechanism. Before IMS, ITC was claimed based on:
(A) Only GSTR-1 data (B) Rule 36(4) — provisional ITC up to 5%/10%/20% above GSTR-2B (C) Manual reconciliation only (D) Bank statement matching

6.After a buyer "Accepts" an invoice in IMS, the ITC appears in:
(A) GSTR-2A (B) GSTR-2B (upon GSTR-2B generation) (C) GSTR-3B automatically (D) Immediately in Credit Ledger

7.After a buyer "Rejects" an invoice in IMS, what happens to the supplier's GSTR-1 data?
(A) Invoice is deleted from supplier's GSTR-1 (B) Rejection is communicated to the supplier; no automatic change in supplier's GSTR-1 (C) Supplier's GST registration is suspended (D) The tax is reversed from supplier's liability

8."Pending" status in IMS means:
(A) The buyer has rejected the invoice temporarily (B) The buyer has deferred the action — ITC is NOT included in GSTR-2B until action is taken (C) GSTN is processing the invoice (D) The invoice is under officer review

9.The IMS column "Whether ITC to be reduced" relates to:
(A) Whether the buyer wants to claim ITC or not (B) Whether the buyer wants to reduce ITC already claimed in a previous period (C) Whether the supplier should reduce tax charged (D) Whether the invoice is under litigation

10.The IMS column "Amount declared for ITC reduction" (IGST/State/UT) is filled when:
(A) Accept action is taken (B) Reject action is taken and the buyer wants to reduce previously claimed ITC (C) Pending action is taken (D) No action is taken

11.The "Remarks by Recipient" column in IMS shows:
(A) Always shows supplier's remarks (B) "No remarks Available" or a "Remark" hyperlink to view buyer's notes (C) The officer's comment (D) Rejection reason code

12.IMS actions impact which return?
(A) GSTR-1 of the supplier (B) GSTR-2B of the buyer (auto-populated ITC based on Accept/Reject/Pend) (C) GSTR-3B of the supplier (D) Annual return GSTR-9

13.When a buyer changes action from "Accept" to "Reject" in IMS, the GSTR-2B:
(A) Is updated immediately (B) Is regenerated on the next GSTR-2B generation date (C) Is not changed (D) Requires officer to re-generate

14.IMS is available for which category of taxpayers?
(A) All taxpayers including composition (B) Regular GSTR-1/3B filers only (not composition/TDS/ECO) (C) Only exporters (D) Only taxpayers above ₹5 crore

15.A "Reject" action in IMS costs the buyer:
(A) 2 credits (B) 1 credit (C) Free — no credit (D) ₹100 fee

16.The deadline for taking IMS action (Accept/Reject/Pend) on an invoice is:
(A) Within 7 days of supplier filing (B) Before GSTR-3B due date of that period (C) Any time — no deadline (D) Before annual return filing

17.If IMS action is not taken by the buyer by GSTR-3B due date, the invoice is treated as:
(A) Rejected (B) Accepted (deemed accepted) and ITC auto-flows into GSTR-2B (C) Held permanently (D) Cancelled

18.IMS "Pend" action allows the buyer to:
(A) Claim ITC now and review later (B) Defer decision — ITC is excluded from GSTR-2B until Pend is changed (C) Process ITC at half value (D) Trigger a reconciliation notice

19.The purpose of IMS is to:
(A) Replace GSTR-1 filing (B) Give buyers control over which supplier invoices contribute to their GSTR-2B ITC (C) Allow buyers to edit supplier invoices (D) Auto-file GSTR-3B

20.In IndIaTaxSim, IMS view (without any action) is:
(A) 1 credit (B) Free — no credit required (C) 2 credits (D) ₹50 fee

21.Which GSTR-1A action is triggered by an IMS rejection from the buyer?
(A) Supplier must file GSTR-1A within 24 hours (B) Supplier is notified and may choose to issue credit note or file GSTR-1A — not mandatory (C) GSTR-1 is cancelled automatically (D) Supplier must refund tax to buyer

22.IMS was introduced alongside which GSTR?
(A) GSTR-1A (both introduced together in 2023–24) (B) GSTR-9 (C) GSTR-2B (D) GSTR-7

23.After filing GSTR-3B, can the buyer change IMS action for the same period?
(A) Yes — any time (B) No — IMS actions are locked for periods where GSTR-3B is already filed (C) Only with officer permission (D) Yes — within 30 days of GSTR-3B filing

24.In IndIaTaxSim, IMS shows invoices from which source?
(A) From e-Invoice (IRP) directly (B) From gstr2a_inward_invoices table — populated by supplier's GSTR-1 filing (C) From buyer's own invoice records (D) From GSTN directly via API

25.The "Whether ITC to be reduced" column in IMS is applicable when:
(A) Buyer accepts the invoice (B) Buyer rejects the invoice and has previously claimed ITC on it (C) Invoice is in Pending status (D) GSTR-3B is not filed

26.If a buyer has previously claimed ITC on an invoice and later rejects it in IMS, they must:
(A) Wait for the supplier to cancel the invoice (B) Reverse the ITC in GSTR-3B Section 4(B) for that period or declare reduction in IMS (C) File GSTR-9C (D) Contact GSTN helpdesk

27.IMS replaces which older disputed process?
(A) GSTR-2 filing (which was suspended in 2017) (B) GSTR-3B Amendment (C) GSTR-1A (D) Annual return reconciliation

28.The GSTR-2B for Month M is generated on the:
(A) 1st of Month M+1 (B) 14th of Month M+1 (C) 20th of Month M (D) 13th of Month M+1

29.If a supplier files an amended GSTR-1A after GSTR-2B generation, the buyer's GSTR-2B is:
(A) Not updated — already generated (B) Regenerated with amended values before buyer files GSTR-3B (C) Updated only if buyer accepts in IMS (D) Updated only after annual reconciliation

30.IMS is introduced to solve the problem of:
(A) Duplicate GST registration (B) ITC mismatches between supplier's GSTR-1 and buyer's GSTR-3B claims (C) Late filing of GSTR-9 (D) Challan payment failures

31.Which column in IMS shows the amount the buyer declares for ITC reduction?
(A) ITC Available (B) Amount declared for ITC reduction (separate IGST, CGST, SGST columns) (C) Net ITC (D) ITC Claimed

32.In the real GST portal, IMS invoices that are "Accepted" by the buyer appear in GSTR-2B under:
(A) Part A — ITC from GSTR-1 (B) Part B — ITC reversed by buyer (C) Part C — TDS/TCS credits (D) Part D — documents from IRP

33.A supplier files GSTR-1 on 8th of November for October. When will the buyer see this in IMS?
(A) 8th November immediately (B) After GSTR-2B generation date (14th November) (C) After buyer logs into IMS portal (D) Only after GSTR-3B due date

34.IMS action "Reject with ITC reduction" means:
(A) The buyer claims ITC and reduces it by the rejection amount (B) The buyer does not want ITC from this invoice AND declares reversal of any previously claimed ITC (C) The supplier must refund the tax to the buyer (D) The invoice is transferred to the supplier for correction

35.Can a buyer in IMS partially accept an invoice (accept part of the amount)?
(A) Yes — line-item level acceptance is possible (B) No — IMS operates at invoice level only (full Accept, Reject, or Pend) (C) Yes — but only for amounts above ₹1 lakh (D) Only if supplier agrees

36.IMS "Pend" action can be changed to "Accept" or "Reject" later:
(A) Yes — until GSTR-3B is filed for that period (B) No — Pend is permanent once selected (C) Only within 7 days of selecting Pend (D) Only with GST officer approval

37.The IMS module in IndIaTaxSim deducts how many credits per IMS reject action?
(A) 0 — viewing and acting is free (B) 1 credit per reject action (C) 2 credits (D) Free — but viewing costs 1

38.After which event does GSTR-2B lock for a period (no more updates)?
(A) After supplier files GSTR-1 (B) After the buyer files GSTR-3B for that period (C) After the GST officer approves (D) After annual return is filed

39.IMS makes GSTR-2B more accurate by:
(A) Removing supplier invoices that are disputed (B) Including only invoices the buyer has Accepted (or deemed accepted), excluding Rejected/Pending ones (C) Merging GSTR-1 data from all suppliers (D) Applying AI to detect fake invoices

40.The "Remark" hyperlink in IMS Remarks column shows:
(A) Supplier's explanation (B) Buyer's notes entered during the Reject action (C) GST officer comments (D) GSTN automated message

41.IMS invoice data in IndIaTaxSim is stored in:
(A) gstr1_b2b_entries (B) gstr2a_inward_invoices (C) gstr2b_summary (D) einvoices

42.If a buyer changes a "Pend" to "Accept" after GSTR-2B is generated for that period:
(A) ITC is auto-added to next period GSTR-2B (B) GSTR-2B is not regenerated — ITC is claimed in the next available GSTR-2B cycle (C) Immediate credit to Credit Ledger (D) Requires officer approval

43.After IMS "Accept", the ITC in GSTR-2B flows to GSTR-3B Section:
(A) 3.1 — outward supplies (B) 4(A) — ITC available (C) 4(B) — ITC reversed (D) 5 — interest

44.The full form of GSTN is:
(A) GST National Network (B) Goods and Services Tax Network — the IT backbone of GST (C) Government Sales Tax Notification (D) GST Nodal Authority

45.Which of the following has NO impact on IMS?
(A) Supplier filing GSTR-1 (B) Buyer filing GSTR-3B (locks IMS for that period) (C) Supplier cancelling registration (D) Supplier generating IRN for a B2B invoice

46.IMS was rolled out for all taxpayers from:
(A) July 2017 (B) October 2023 (gradually) (C) January 2020 (D) April 2024

47.The "No remarks Available" text in IMS Remarks column means:
(A) The buyer has not entered any notes for this invoice's action (B) The supplier has not uploaded the invoice (C) GSTN is processing the remark (D) The officer has not reviewed it

48.IMS action history is visible to:
(A) Both buyer and supplier (B) Only the buyer (C) Only the supplier (D) Only GST officers

49.An invoice that appears in IMS but the supplier has not yet filed GSTR-1 is:
(A) Not possible — IMS only shows GSTR-1 filed invoices (B) Shown as "Pending supplier action" (C) Shown as draft (D) Shown with zero tax

50.After GSTR-1A is filed by the supplier, previously Accepted invoices in IMS that now have amended values:
(A) Keep the original Accept status with new values auto-updated (B) Are re-presented in IMS for buyer to review with revised values (C) Are automatically Rejected (D) Require officer processing

Answer Key

1–A 2–B 3–B 4–B 5–B 6–B 7–B 8–B 9–B 10–B 11–B 12–B 13–B 14–B 15–B 16–B 17–B 18–B 19–B 20–B 21–B 22–A 23–B 24–B 25–B 26–B 27–A 28–B 29–B 30–B 31–B 32–A 33–B 34–B 35–B 36–A 37–B 38–B 39–B 40–B 41–B 42–B 43–B 44–B 45–C 46–B 47–A 48–B 49–A 50–B

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