The Invoice Management System: accept, reject, pending and the consequences
Since October 2024, credit is not merely reported. It is accepted. An acceptance is a statement.
The Invoice Management System on the common portal requires a recipient to take an action on each inward document — accept, reject or keep pending — and GSTR-2B is generated from those actions. No action results in deemed acceptance. A rejection removes the document from GSTR-2B and is visible to the supplier. The pending facility operates for a limited period and for specified categories. The change moves the mismatch dispute from the audit stage to the filing stage and creates a dated record of the recipient's own position on every invoice.
How it changes the credit process
GSTR-2B is now an output of your own actions rather than purely of the supplier's reporting. That makes the monthly reconciliation a pre filing activity, not a post filing one.
Deemed acceptance means inaction is a decision. In a later dispute about whether a supply occurred, the department will point to the acceptance.
Rejection is visible to the supplier and requires the supplier to amend or issue a credit note, which makes it a commercial act as well as a compliance one.
Credit notes are also actioned, and rejecting a credit note affects the supplier's output liability, which has become a source of friction between suppliers and large buyers.
The disputes that follow
Deemed acceptance used as evidence of the genuineness of an invoice the taxpayer later disowns.
Rejection used as evidence that the recipient itself doubted the transaction, where the rejection is later reversed.
Pending documents whose window lapses, producing a Section 16(4) argument on the credit.
Credit note rejections and the supplier's consequential demand, which the contract should allocate.
Reconciliation differences between the IMS action log, GSTR-2B and the books, which are now three records that must agree.
The control to build
A named owner with a monthly cut off before the GSTR-3B filing date, and an escalation path for documents that cannot be resolved in time.
A rejection log with a stated reason for every rejected document — not ours, goods not received, value disputed, duplicate — which is contemporaneous evidence of diligence and the most valuable new document in a GST file.
A vendor communication protocol, because a rejection is visible and a silent rejection damages the relationship.
A purchase terms clause dealing with credit notes and IMS actions, so the commercial position is agreed in advance.
What to do on Monday
Assign a named IMS owner with a cut off before the GSTR-3B date.
Maintain a rejection log with a stated reason for every rejected document.
Communicate rejections to vendors before or with the action.
Add an IMS and credit note clause to standard purchase terms.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Is action on every invoice mandatory?
Inaction results in deemed acceptance, so in practice the choice is between a considered action and an unconsidered one.
Does rejection affect the supplier?
Yes. It is visible and may require the supplier to amend or issue a credit note.
How long can a document be kept pending?
For the period and categories prescribed. Verify the current position and diarise the lapse.
Does IMS change Section 16(2)(c)?
It does not remove the condition, but the dated action log materially strengthens the diligence layer.
Should we reject invoices from non filing suppliers?
Not merely for non filing; Rule 37A provides the mechanism. Reject documents you do not accept as yours.
In this cluster
- GST compliance calendar: the recurring dates that matter
- GSTR-1, GSTR-3B and the hard locking of auto populated values
- Bharti Airtel: the limits of rectifying a filed return, and what to do instead
- Credit notes, debit notes and the recipient reversal linkage
- The three year filing bar under Sections 37, 39 and 44
- Interest on delayed payment: Section 50 and Rule 88B
- Records, retention and the documents you must produce in year six
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.