What is Rejected Invoices in IMS Dashboard with Example

The newly introduced invoice management system (IMS) inside the GST portal requires taxpayers to act on invoices, choosing either accept, reject, or pending. Otherwise, the system considers an invoice 'deemed accepted', causing incorrect information to flow to GSTR-2B and leading to compliance issues.

This article explains what a rejected invoice is in the IMS dashboard and how to check a rejected invoice in the Invoice Management System. 

What is a rejected invoice in the IMS dashboard?

In IMS, a rejected invoice is an invoice that a recipient taxpayer has chosen to REJECT inside the IMS dashboard before the GSTR-2B gets generated because of discrepancies between a purchase order and an invoice. Other reasons behind the rejection of invoices can also exist, such as suppliers mistakenly entering invoices in the portal. 

Unless corrected, rejected invoices result in excess tax liability for suppliers or under-reporting of Input Tax Credit (ITC) claims for the buyer, as the invoice does not appear in GSTR-2B. So, suppliers need to view rejected invoices in the IMS dashboards and take the necessary actions.

How to view rejected invoices in IMS?

Once a buyer rejects an inward invoice, the portal reflects the same in the supplier's IMS dashboard. The supplier must make amendments in the GSTR-1 or through GSTR-1A and take other necessary steps to avoid excess tax liability, penalty, and compliance issues. 

It is equally important for buyers to keep track of invoices that they have rejected and check whether the supplier has modified their GSTR-1 or issued credit notes, etc. 

For suppliers: How to view rejected invoices in IMS 

Step 1: Enter the GST portal using login credentials. 

Step 2: Once logged in, navigate to the 'Services' tab and click 'Returns' from the drop-down menu. Under 'Returns,' click the Invoice Management System (IMS) Dashboard option.

Services > Returns > Invoice Management System (IMS) 

Step 3: The IMS Dashboard page will open with 2 separate sections. The one is for viewing 'Inward Supplies' while the other section is for viewing 'Outward Supplies'. 

Inside the 'Outward Supplies' section, suppliers can check the actions (ACCEPT/REJECT/PENDING) taken by the recipients on the invoices they submitted. Click 'VIEW' on the Outward Supplies section. 

Step 4: Select the financial year and the GST return period for which you want to view rejected invoices. For example, if you want to check October 2024 invoices, choose 2024-25 under 'Financial Year' and October under 'Return Period'. Click SEARCH. 

Step 5: Two tabs open up. 

1. To view all B2B supplies reported in GSTR-1/1A by regular taxpayers or in the Invoice Furnishing Facility (IFF) by taxpayers registered under the QRMP scheme (Quarterly Returns with Monthly Payment). 
2. For viewing rejected invoices for which the portal has added your tax liability back in GSTR-3B.   

Step 6: If you, as a supplier, are trying to view rejected invoices before the 20th of a month, you should click the 'Universal view of B2B supplies reported in GSTR-1/1A/IFF' tab. 

After the 20th of the month, you must click 'Rejected records (where liability added back in GSTR-3B)'. In such a case, you can make necessary changes in the next month's GSTR-1. 

For buyers: How to view rejected invoices in IMS

Steps 1 and 2 will be the same for buyers.

Step 3: Click VIEW on the 'Inward Supplies' section. A pop-up message appears with a reminder about 'Deemed accepted' for the GSTR-2B generation. Click OKAY. 

Step 4: A summary of all inward invoices under different categories appears. To view invoices that you have rejected, you need to click the 'B2B-Invoices' category. It opens to the 'IMS Dashboard (Inward Supplies) - B2B Invoices (with all status)' page. On this page, you can also take action on an invoice or change the action you have already taken for an invoice.  

Reasons for Rejection of Invoice in IMS

A buyer can reject an inward invoice for several reasons. Some of them are: 

1. Incorrect information in invoices - Incorrect invoice number, date, or taxable value, differences in GSTIN details of the supplier or recipient.
2. Discrepancies in tax rate or tax amount - The supplier has charged GST at an incorrect rate or made a mistake in tax calculation. 
3. Duplication - Double processing an invoice in the GST portal.
4. Timing-related issues - An invoice for a different period was raised incorrectly for another period. 

Example of rejected invoice in IMS

For example, a baker ordered 100 kg of flour from a retailer. The retailer sent flour in 4 packs of 25 kg each and raised an invoice. Pre-packaged food items in 25 kg or more packs attract 0% GST. However, the retailer mistakenly charged 5% GST in the invoice and submitted the same in the portal. The baker accepted the supply but rejected the invoice in the IMS and informed the supplier to amend his GSTR-1.

Related Articles:
Exemptions under Invoice Management System (IMS)
FAQs on Invoice Management System (IMS) in GST
Future of GST Compliance with Invoice Management System (IMS)