Summary: Businesses are receiving clarifications regarding the handling of invoices, debit notes, and credit notes that are incorrectly rejected in the GST Invoice Matching System (IMS), even if the corresponding tax returns (GSTR-3B) have already been filed. If a document is wrongly rejected by the recipient, they can claim the Input Tax Credit (ITC) by requesting the supplier to re-report the same document in their GSTR-1A or a future GSTR-1 amendment table. The system will recognize the re-reported document and allow the recipient to recompute their GSTR-2B to claim the full ITC. The supplier’s tax liability will not be affected by re-reporting an unchanged document. Similarly, if a credit note is wrongly rejected, the supplier can re-report it, allowing the recipient to reverse the ITC, with a net-zero impact on the supplier’s liability. These clarifications emphasize the need for businesses to monitor their IMS dashboards and coordinate with their partners to correct any discrepancies.
Q1: How can a recipient avail ITC on wrongly rejected invoices, debit notes, or ECO-documents?
The recipient can request the supplier to re-report the same record (unchanged) in:
GSTR-1A of the same period, or Amendment table of a future GSTR-1/IFF return (within permitted time).
Once done, the recipient can accept the amended record on IMS and recompute GSTR-2B to claim full ITC.
ITC can be claimed only in the GSTR-2B of the period in which the document is again furnished.
Q2: Will the supplier’s liability increase if the same document is re-reported after rejection?
No. If the same details are furnished again (unchanged), and captured in GSTR-1A or amendment tables, the system captures only the difference (delta value).
Since the values are unchanged, there’s no increase in liability for the supplier.
Q3: How can a recipient reverse ITC of a wrongly rejected credit note (CN) in IMS?
The supplier should re-report the same CN (unchanged) in GSTR-1A or future GSTR-1/IFF return.
The recipient must accept the amended CN on IMS and recompute GSTR-2B to reflect the reduction in ITC.
The entire value of the original CN (which was earlier rejected) will be reversed.
Q4: What is the impact on the supplier’s liability for re-reported credit notes?
Initially, the supplier’s liability increases due to the CN rejection by the recipient.
When the same CN is furnished again, the supplier’s liability decreases for the same amount.
Net impact: Zero, as the system accounts for the change only once.
Key Takeaway: Both recipients and suppliers should closely monitor the IMS dashboard and coordinate timely reporting and correction of rejected documents to ensure accurate ITC and tax liability positions.
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