On October 17, 2025, the Goods and Services Tax Network (GSTN) introduced a major update to the Invoice Management System (IMS) on the GST portal. This update enhances the handling of credit notes and Input Tax Credit (ITC) reversals. The new system introduces a “Pending” option for credit notes, allowing taxpayers to defer action for one tax period, and a flexible feature to declare the ITC reversal amount.
This improvement aims to reduce business disputes, streamline reconciliation processes, and enhance compliance efficiency across sectors.
Understanding the IMS Credit Note Facility
The IMS credit note facility GST is a central tool on the GST portal for managing invoices, credit notes, and ITC claims. With this update, taxpayers can now mark credit notes as “Pending”, allowing them more time to reconcile and verify transactions before accepting or rejecting them.
Previously, credit notes required immediate acceptance or rejection, often causing disputes between suppliers and recipients. The Credit Notes “Pending” Option & ITC Reversal in GSTN-IMS now offers a buffer period of one tax cycle, allowing users to investigate discrepancies and take informed decisions.
Additionally, the new system enables taxpayers to declare the exact ITC reversal amount applicable to a credit note, supporting partial utilization and improved accuracy.
Key Benefits of the IMS Update
- Flexibility in ITC Reversal: Allows reversal of only the applicable portion of ITC rather than the full amount.
- Dispute Resolution: The “Pending” status reduces supplier-recipient conflicts by providing time for verification.
- Improved Audit Trail: Users can add remarks while marking credit notes as “Pending” or “Rejected.”
- Enhanced Compliance: Accurate reconciliation helps businesses avoid penalties due to mismatched or incorrect reversals.
How to Use IMS in the GST Portal
To access and use the new IMS credit note facility GST, follow these steps:
- Log in to the GST portal.
- Go to Services → Returns → Invoice Management System (IMS).
- Select the relevant tax period.
- View all credit notes issued or received.
- Choose to Accept, Reject, or mark the note as Pending.
- If accepting, enter the ITC reversal amount.
- Add remarks for internal records or audit.
- Submit the details and save the confirmation.
This process ensures that all credit notes and reversals are properly recorded in the IMS dashboard in GST.
Business Impact of the IMS Credit Note Facility
The introduction of the “Pending” option for Credit Notes and ITC Reversal declaration in the GSTN Invoice Management System (IMS) has a significant positive business impact. This update streamlines compliance, minimizes reconciliation challenges, and enhances dispute resolution efficiency. Businesses, especially in the manufacturing, retail, and service sectors, frequently deal with credit notes for returns, rate adjustments, or post-sale discounts.
The new functionality allows taxpayers to keep credit notes in a pending state for one tax period, helping them avoid premature Input Tax Credit (ITC) reversals. It provides companies the flexibility to verify vendor data, resolve mismatches, and ensure accuracy before finalizing their filings.
Moreover, maintaining pending notes helps strengthen audit trails, supports better vendor coordination, and ensures transparency in credit utilization. Overall, this enhancement in the GSTN-IMS system improves compliance accuracy, reduces disputes, and enables more efficient collaboration between accounting and tax compliance teams.
Technical Enhancements in the Invoice Management System (IMS)
The recent technical enhancements in the Invoice Management System (IMS) have made GST compliance more efficient and user-friendly. The redesigned IMS dashboard now features intuitive navigation and smart filters that allow users to easily track the status of credit notes. Businesses can now accept or reject multiple credit notes in bulk, reducing manual effort and saving valuable time during reconciliation. The introduction of downloadable reconciliation reports provides better data transparency and helps companies maintain accurate audit records.
Additionally, real-time notifications and improved tracking ensure that taxpayers stay updated on all actions related to invoices and credit notes. These enhancements collectively make the GST filing process faster, more reliable, and simpler for businesses of all sizes, improving coordination between vendors and buyers while minimizing compliance errors. The new IMS update marks a major step forward in strengthening automation and accuracy within the GST ecosystem.
IMS Credit Note Facility vs Previous System at GST portal
| Feature | Previous System | Updated IMS |
| Credit Note Status | Only Accept/Reject | “Pending” Option Added |
| ITC Reversal | Full Reversal | Partial Reversal Allowed |
| Remarks | Optional | Mandatory for Rejection/Pending |
| Audit Trail | Limited | Enhanced with Remarks |
| Flexibility | Low | High |
Training and Support- Guide for IMS
The GST Network (GSTN) has introduced extensive training and support resources to help taxpayers adapt smoothly to the latest IMS updates. These include interactive webinars and tutorials on navigating and using the Invoice Management System within the GST portal. Additionally, a dedicated helpdesk and technical assistance are available to address user queries and system-related issues promptly. The GSTN has also released updated IMS advisory documents, providing detailed guidance on new features, including the “Pending” option and ITC reversal process.
Taxpayers are strongly encouraged to train their accounting and compliance teams, revise their internal processes, and align workflows with the enhanced IMS functionality. By leveraging these resources, businesses can ensure seamless adoption, maintain compliance accuracy, and fully utilize the improved capabilities of the GST portal.
Conclusion
The new Credit Notes “Pending” Option & ITC Reversal in GSTN-IMS is a transformative step toward smarter GST compliance. By allowing partial ITC reversals and introducing the Pending feature, the Invoice Management System (IMS) gives taxpayers greater flexibility, accuracy, and control.
With IMS mandatory from October 2025, every business should familiarize itself with the IMS dashboard in GST, stay updated with IMS advisory GST communications, and integrate these processes into their compliance systems.
This enhancement ensures improved reconciliation, reduced disputes, and better financial accuracy across the GST ecosystem.
FAQs
1. Why is the new IMS update important for businesses at GST portal
The Credit Notes “Pending” Option & ITC Reversal in GSTN-IMS helps businesses reduce disputes, improve reconciliation, and enhance compliance. It enables flexibility in ITC reversal at GST portal, ensures better tracking via the IMS dashboard in GST, and strengthens overall financial accuracy for organizations across all sectors.
2. What is the purpose of the new IMS credit note facility GST update?
The IMS credit note facility GST update helps taxpayers manage credit notes and ITC reversals more efficiently. It introduces a “Pending” option, partial reversal feature, and better audit trails—ensuring transparency, dispute reduction, and enhanced compliance in the Invoice Management System (IMS) on the GST portal.
3. Is the IMS credit note facility GST mandatory for all taxpayers?
Yes. The IMS GST functionality has become mandatory for all registered taxpayers, including regular and composition scheme filers. From October 2025, all businesses must manage their credit notes, ITC reversals, and related actions through the Invoice Management System (IMS) for better accuracy and compliance tracking.
4. IMS GST mandatory or not?
Yes, the IMS GST module is now mandatory. All taxpayers must use it to manage invoices and credit notes on the GST portal. The move ensures uniformity, transparency, and easier monitoring of ITC reversals, reducing discrepancies in reporting and improving GST compliance for businesses across industries.
5. IMS mandatory from which month?
The Invoice Management System (IMS) update, including the Credit Notes “Pending” Option & ITC Reversal in GSTN-IMS, is mandatory from the October 2025 tax period. From this month onward, all taxpayers are required to handle credit notes and ITC reversal declarations through the GST portal’s IMS dashboard.
6. How to Use IMS in the GST portal?
To use IMS, log in to the GST portal, navigate to Services>Returns>Invoice Management System (IMS), and select your tax period. You can view, accept, reject, or mark credit notes as “Pending,” enter ITC reversal amounts, and add remarks to maintain a clear audit trail.
7. What happens when a credit note is marked as “Pending”?
When marked as “Pending” in the Invoice Management System (IMS), the credit note remains unprocessed for one tax period. This allows taxpayers to reconcile and verify details with suppliers before acceptance or rejection, ensuring accuracy in Credit Notes “Pending“ Option & ITC Reversal in GSTN-IMS operations.
8. IMS credit note rejected – what to do next?
If an IMS credit note is rejected, the supplier is notified automatically. The rejection halts ITC reversal processing for that credit note. Taxpayers should add remarks explaining the reason and communicate with vendors to resolve discrepancies before reissuing or re-evaluating the note in the IMS system.
9. Can ITC reversal be modified after acceptance in IMS?
Yes. The Invoice Management System (IMS) allows taxpayers to modify or adjust the ITC reversal amount even after accepting a credit note, provided the correction is made within the same tax period. This flexibility supports accurate compliance and reduces the risk of reporting errors in GST filings.
10. How does the IMS dashboard in GST help taxpayers?
The IMS dashboard in GST offers a centralized view of all invoices and credit notes. It lets users track statuses such as Pending, Accepted, or Rejected, perform bulk actions, add remarks, and download reports. This organized workflow improves efficiency and supports better audit and reconciliation management.
11. What if no action is taken on a credit note in IMS?
If no action—Accept, Reject, or Pending—is taken on a credit note in the Invoice Management System (IMS), the system may auto-process it based on predefined rules. This could lead to automatic ITC reversal or deemed acceptance, so timely review and action are essential for compliance accuracy.
12. Can I reverse only part of the ITC using the new IMS facility?
Yes, the new IMS credit note facility GST enables partial ITC reversal. Taxpayers can enter the exact amount of credit to reverse based on utilization or adjustment of the original invoice. This targeted feature minimizes over-reporting and enhances the precision of ITC Reversal in GSTN-IMS.
13. Where can I find IMS advisory GST updates?
Official IMS advisory GST updates are published on the GST portal’s News & Updates section. They provide guidelines, usage instructions, and clarification on recent changes in the Invoice Management System (IMS), helping taxpayers understand new features, deadlines, and best practices for accurate GST compliance.
14. What are the new changes in the Invoice Management System?
The new changes in the Invoice Management System include the introduction of a Pending option, partial ITC reversal capability, improved audit trails, bulk action features, and detailed remark options. These enhancements streamline credit note handling and boost accuracy in the Credit Notes “Pending” Option & ITC Reversal in GSTN-IMS workflow.
ALSO READ
New GST Registration approval process
GST Registration for Amazon and Flipkart Sellers