Input Tax Credit Under GST: How to Reconcile GSTR-2B and IMS Every Month (2026)
A five-step monthly routine for GSTR-2B and the Invoice Management System: the calendar, mismatch fixes, credit notes, Rule 88D and the 30 November 2026 cut-off.
Input tax credit under GST is now claimed through GSTR-2B, so reconciling it every month is the core of ITC compliance. The routine has five steps:
- Before the 14th, review each supplier record in the Invoice Management System (IMS) and accept, reject or keep it pending. Records left untouched are deemed accepted.
- When GSTR-2B is generated on the 14th, compare it with the purchase register.
- Fix mismatches with suppliers, and recompute GSTR-2B after any further IMS actions.
- File GSTR-3B. Table 4 is auto-populated from GSTR-2B; report blocked and temporary reversals separately.
- Track missing invoices, unpaid bills and credit notes into the following months.
Since the October 2025 tax period, credit notes can be kept pending for one period, and you declare how much credit to reverse. Claiming more than GSTR-2B supports can trigger a Rule 88D intimation. FY 2025-26 credit must be claimed by 30 November 2026. This guide from CA Nainit Savla, Chartered Accountants in Mumbai, explains each step and is based on the law and published sources as of 30 October 2026. For the firm’s work in this area, see our GSTR-2B reconciliation and ITC review page.
- Rule 36(4): credit only on records in GSTR-2B; IMS actions decide what is in it.
- Untouched records are deemed accepted; review IMS before the 14th.
- Acceptance is not eligibility: blocked credits are accepted, then reversed in Table 4(B)(1).
- Credit notes: pending for one period; declare only the credit actually claimed.
- Deadline: claim FY 2025-26 credit by 30 November 2026.
What Does the Monthly ITC Calendar Look Like?
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| When | What happens | Your action |
|---|---|---|
| By the 11th (13th for QRMP IFF) | Suppliers file GSTR-1 or IFF; records appear in IMS | Chase key suppliers who have not filed |
| Up to the 14th | IMS open for actions | Accept, reject or keep pending; compare with purchase register |
| 14th | GSTR-2B generated; untouched records deemed accepted | Download GSTR-2B; run the reconciliation |
| 14th to GSTR-3B filing | Further IMS actions allowed | Correct actions, then recompute GSTR-2B |
| 20th (22nd or 24th for QRMP) | GSTR-3B due; Table 4 auto-populated | Report reversals; file; actions for the period are frozen |
| Following months | Late uploads move to later GSTR-2B | Track open items and claim within section 16(4) |
How Should Each Mismatch Be Handled?
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| Mismatch | Likely cause | Action |
|---|---|---|
| In books, not in IMS or GSTR-2B | Supplier has not filed; wrong GSTIN; uploaded late | Do not claim; follow up; claim when it appears |
| In IMS, not in books | Not your invoice; duplicate; goods not received | Reject if wrong; keep pending if goods are still to arrive |
| Different value, tax or rate | Supplier error | Reject; supplier corrects through GSTR-1A or an amendment |
| IGST shown instead of CGST and SGST, or vice versa | Wrong place of supply | Reject; supplier amends |
| Blocked item (section 17(5)) | Correct invoice, ineligible credit | Accept; reverse in Table 4(B)(1). See our ITC eligibility guide |
| Supplier unpaid beyond 180 days | Payment condition not met | Reverse in Table 4(B)(2); reclaim on payment |
| Credit note from supplier | Discount, return or price change | Accept and declare the credit to reverse, or keep pending for one period |
| Reverse charge purchase | Not routed through IMS | Pay tax; claim in Table 4(A)(3) |
How Do Credit Notes Work Now?
From the October 2025 tax period, a recipient can keep a credit note pending for one tax period. When accepting it, the recipient states whether credit needs reducing: no reduction, the full amount or a stated amount. This means only the credit actually claimed on the original invoice is reversed. A supplier’s credit note reduces its own tax liability only when the recipient accepts it, so suppliers will follow up on rejected or pending notes.
What Should the Reconciliation File Contain?
- Purchase register with supplier GSTIN, invoice number, date, taxable value, tax by head and posting period.
- GSTR-2B for the period, after recompute, and the IMS action log. Where older periods are involved, a GSTR-2A reconciliation working may also be needed.
- Matched items, and open items by type: not in GSTR-2B, rejected, pending, blocked, unpaid beyond 180 days.
- Supplier follow-up notes and expected filing dates.
- GSTR-3B Table 4 working, showing auto-populated figures, reversals and reclaims.
What Should Be Finished Before 30 November 2026?
- Run a full-year FY 2025-26 reconciliation of books, GSTR-2B and GSTR-3B.
- Claim any eligible missed credit in the October 2026 GSTR-3B or another return filed by 30 November 2026.
- Clear pending credit notes and reverse credit on bills unpaid beyond 180 days.
- Keep the working papers for GSTR-9 and GSTR-9C, due 31 December 2026.
What Should Businesses Watch Into 2027?
- Hard-locking of Table 4 in GSTR-3B. It has been reported as targeted, but no dated GSTN advisory confirming it was found.
- Further IMS changes, especially for imports and amendments.
- The GST process reforms approved at the 57th GST Council meeting, which the Finance Minister has said take effect from 1 April 2027.
- Businesses with accumulated credit from an inverted duty structure should also read about inverted duty structure refunds.
Frequently Asked Questions About GSTR-2B and IMS Reconciliation
Why is GSTR-2B reconciliation necessary for input tax credit?
Under section 16(2)(aa) of the CGST Act and Rule 36(4), credit can be claimed only on invoices and debit notes that the supplier has reported and that appear in your GSTR-2B. Since the October 2025 tax period, Table 4 of GSTR-3B is auto-populated from GSTR-2B. Reconciling purchases with GSTR-2B shows what you can claim, what is missing and what should not be there. Our GSTR-2B reconciliation and ITC review page describes the review in more detail.
What is the Invoice Management System (IMS)?
IMS is a GST portal facility where a recipient can accept, reject or keep pending each invoice, debit note and credit note uploaded by suppliers. Those actions decide what appears in GSTR-2B. Records with no action are deemed accepted when GSTR-2B is generated on the 14th of the following month.
When should IMS actions be taken each month?
Ideally before the 14th, when GSTR-2B is generated. Actions can still be taken after that and GSTR-2B recomputed, up to the filing of GSTR-3B. Once GSTR-3B for the period is filed, the accepted and rejected records for that period are frozen.
Should a blocked credit invoice be rejected in IMS?
Generally no. IMS acceptance confirms that the invoice is genuine and correct. It does not make the credit eligible. A correct invoice for a blocked item under section 17(5), such as food or a motor car, is accepted, and the credit is reported as reversed in Table 4(B)(1) of GSTR-3B. Our ITC eligibility guide covers eligibility and blocked credits.
What should be done when an invoice is in the books but not in GSTR-2B?
Do not claim it yet. Check the supplier’s GSTIN and filing status, and ask the supplier to report it. When it appears in a later GSTR-2B, claim it in that period, within the section 16(4) deadline.
How do credit notes work in IMS since October 2025?
From the October 2025 tax period, a credit note can be kept pending for one tax period. When accepting it, the recipient declares whether credit needs reducing and by how much, so only credit actually claimed is reversed. A supplier’s credit note reduces its liability only when the recipient accepts it.
What if an invoice is rejected by mistake?
The supplier can report the same record again, through GSTR-1A or an amendment in a later GSTR-1. The recipient then accepts it in IMS and recomputes GSTR-2B, or claims it in a later period.
What is a Rule 88D intimation (DRC-01C)?
If the credit claimed in GSTR-3B exceeds the credit in GSTR-2B beyond the threshold set on the portal, the taxpayer receives an intimation in DRC-01C. Within seven days, it must either pay the excess with interest through DRC-03 or explain the difference. If it does neither, filing of the next GSTR-1 can be blocked.
Is reverse charge credit shown in IMS?
No. Supplies under reverse charge do not pass through IMS. The recipient pays the tax and claims the credit in Table 4(A)(3) of GSTR-3B, subject to the usual conditions.
What is the deadline to claim FY 2025-26 credit?
Under section 16(4), credit for FY 2025-26 must be claimed by 30 November 2026 or the date of filing the annual return, whichever is earlier. In practice, that means the GSTR-3B for October 2026, filed by 20 November 2026, or another GSTR-3B filed on or before 30 November 2026.
CA Nainit Savla
CA Nainit Savla is a Chartered Accountant practising in Mumbai and Hyderabad, advising on tax, GST, company law, FEMA and valuation matters.
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