Background
The GSTN has introduced significant enhancements to the Invoice Management System (IMS) starting from the October 2025 tax period. These updates aim to improve reconciliation, accuracy in Input Tax Credit (ITC) management, and enhance coordination between suppliers and recipients.
Key Highlights of the New Changes
| Sl. No. | Question / Area | Clarification / Key Points |
| 1 | For which documents has the “Pending” option been added? | Now available for: Credit Notes (CNs) & amendments, Downward CNs (if original rejected), Downward Invoice/DN (if accepted & 3B filed), and ECO document amendments. |
| 2 | What new functionalities are introduced? | Pending action allowed, ITC reduction declaration by recipient, and option to add remarks when taking Reject/Pending action. |
| 3 | Are these changes prospective or retrospective? | All changes are prospective, applicable from October 2025 tax period onwards. |
| 4 | Till when can documents be kept “Pending”? | Monthly taxpayers – 1 month; Quarterly taxpayers – 1 quarter. Pending allowed up to due date of next GSTR-3B + one tax period. |
| 5 | What if no action is taken within the allowed period? | If no action within allowed time, record is deemed accepted. Pending option disabled thereafter. |
| 6 | Can taxpayers declare ITC to be reversed? | Yes. Option appears when accepting CNs. If ‘Yes’, recipient may declare full or partial reversal. Reflects in GSTR-2B and 3B. |
| 7 | Can remarks be saved while taking Reject / Pending action? | Yes, remarks can be added. Mandatory in partial or no reversal cases. |
Impact Matrix – IMS Actions & Tax Effect
| Record Type | Recipient Action | Whether ITC needs to be reduced? | ITC Impact (GSTR-2B) | Supplier Liability (GSTR-3B) |
| Credit Note (CN) | Accept | Yes | ITC reversed (full / declared amt) | Nil |
| Credit Note (CN) | Accept | No | No impact | Nil |
| Credit Note (CN) | Reject | NA | Nil | Supplier liability increases (full amt) |
| Credit Note (CN) | Pending | NA | Nil | Nil |
| CNA Upward | Accept | Yes | ITC reversed (delta / declared amt) | Nil |
| CNA Upward | Reject | NA | Nil | Supplier liability increases (delta) |
| CNA Downward | Accept | Yes | ITC reversed (full / declared amt) | Supplier liability reduced (delta) |
| B2BA/DNA Downward | Accept | Yes | ITC reversed (delta / declared amt) | Supplier liability reduced (delta) |
Key Takeaways for Taxpayers
1. Pending facility expanded to Credit Notes and amendments.
2. Partial ITC reversal disclosure now available – improves accuracy in GSTR-2B and 3B.
3. Deemed acceptance rule – no action = automatic acceptance.
4. Mandatory remarks for partial / no reversal actions ensure traceability.
5. Prospective implementation – effective from October 2025 returns onwards.
6. Helps reduce mismatch cases and auto-aligns supplier-recipient records within IMS.
Issued for circulation by:
Mohan & Chandrasekhar Chartered Accountants
(For internal and client awareness – based on GSTN FAQ dated 15 October 2025)