IMS deeming provision: what happens when no action is taken by recipient

In practice, many business owners and accounts teams assume that ignoring the Invoice Management System simply leaves their returns as they were. In our tool and during regular reconciliations, we found that on the GST portal, inaction is itself an action. Inward records uploaded by your vendors in GSTR-1, GSTR-1A, or the Invoice Furnishing Facility (IFF) sit in the "No Action Taken" column by default. When the cutoff date passes, the system converts that entire column into accepted records.

The statutory and portal mechanics of deemed acceptance

The legal foundation of input tax credit communication sits in Section 38 of the CGST Act read with Rule 60(7) of the CGST Rules. Under Rule 60(7), Form GSTR-2B is an auto-drafted statement generated for every registered person based on details furnished by suppliers in their outward statements.

To implement recipient confirmation, GSTN launched the Invoice Management System. According to the official GSTN Revised Advisory on IMS and the GSTN IMS FAQ, the system handles recipient choices through specific operational rules:

1. Default status: Every inward document saved or filed by a supplier flows into the IMS dashboard under the "No Action Taken" category.
2. Deeming on cutoff: At the time of GSTR-2B generation on the 14th of the succeeding month, all records remaining with "No Action" status are treated as deemed accepted.
3. Auto-population: Deemed accepted invoices move into the "ITC Available" section of Form GSTR-2B. From GSTR-2B, they auto-populate into Table 4(A)(5) (All other ITC) of Form GSTR-3B.
4. Credit notes: If a supplier uploads a credit note and you take no action, that credit note is also deemed accepted, which auto-reduces your ITC in Table 4(A)(5).

The hidden danger: Section 16(2) non-compliance

Under Section 16(2) of the CGST Act, no registered person can take input tax credit unless four core conditions are met:

1. Possession of a tax invoice or debit note issued by a registered supplier (Section 16(2)(a)).
2. Actual receipt of the underlying goods or services (Section 16(2)(b)).
3. Tax charged has actually been paid to the Government by the supplier (Section 16(2)(c)).
4. The recipient has furnished the return under Section 39 in Form GSTR-3B (Section 16(2)(d)).

In addition, Section 16(2)(ba) requires that the credit communicated under Section 38 has not been restricted. When you take no action on IMS, the portal assumes you have satisfied all conditions and pushes the invoice into GSTR-2B. But if the material is still in transit on a lorry, or if a supplier mistakenly quoted your GSTIN on another party's consignment, deemed acceptance pulls that credit directly into your return.

If you file GSTR-3B claiming that credit, you commit a direct breach of Section 16(2)(b). In a departmental audit, officers match your purchase register and Goods Receipt Notes (GRN) with the GSTR-2B claim date. If the GRN is dated after the tax period cutoff, the credit is disallowed under Section 74A, attracting mandatory interest at 18 percent per annum under Section 50(3) from the date of utilisation until reversal.

Status comparison: No Action vs Accept vs Pending vs Reject

Understanding the exact destination of each status code in IMS is vital for managing monthly cash flow:

For detailed steps on deferring goods in transit, refer to our guide on IMS pending invoices. To understand how GSTR-2B tables interact with return filing, check our walkthrough on how GSTR-2B feeds GSTR-3B.

Step-by-step portal workflow to review deemed records

Rather than letting all inward documents pass through deemed acceptance, review your IMS dashboard before filing Form GSTR-3B:

1. Navigate to IMS: Log in to the GST portal and go to Services → Returns → Invoice Management System (IMS) Dashboard.
2. Open Inward Supplies: Click on Inward Supplies. The dashboard displays sections for B2B Invoices, Credit Notes, Debit Notes, and Amendments.
3. Filter No Action records: Click on the number under the No Action column for any category. Review records where supplier GSTIN, invoice value, or date does not match your internal purchase register.
4. Take selective action: For goods received and verified, you can leave them under No Action (deemed accepted) or mark them as Accept. For material still in transit, select Pending. For invoices that do not belong to you or have incorrect billing, select Reject.
5. Recompute GSTR-2B: If you take any action after the 14th of the month (the generation of draft GSTR-2B), click Compute GSTR-2B on the IMS dashboard. The portal refreshes your GSTR-2B values within a few minutes, updating the figures ready for GSTR-3B auto-population.

Worked arithmetic example: passive deeming vs active reconciliation

For example, consider a real case of a mid-sized engineering workshop, Precision Spares Pvt Ltd, reconciling inward supplies for September 2026. Suppliers uploaded five invoices totaling ₹8,50,000 in taxable value with ₹1,53,000 in IGST (18 percent).

Under passive deeming (taking no action), the full ₹1,53,000 auto-populates into GSTR-2B Table 4(A)(5). Precision Spares claims ₹1,53,000 in GSTR-3B. However, only ₹81,000 (INV-101 and INV-102) meets the statutory receipt test of Section 16(2)(b).

The company has excess claimed ₹72,000 (₹36,000 + ₹18,000 + ₹18,000). During a departmental scrutiny, the officer discovers the premature transit claim and the duplicate billings. The company must reverse ₹72,000 with 18 percent interest under Section 50(3), plus potential penalties under Section 122 for incorrect credit availment.

With active reconciliation on IMS, marking INV-103 as Pending and INV-104 and INV-105 as Reject leaves exact eligible credit of ₹81,000 in GSTR-2B, completely eliminating tax exposure.

Common pitfalls with the deeming provision

• Credit notes passing unnoticed: If a vendor issues an upward debit note or a credit note reducing price, and your accounts team ignores IMS, the credit note is deemed accepted. If the credit note is disputed, you lose the opportunity to flag the discrepancy before your GSTR-3B is reduced.
• Forgetting to click Recompute GSTR-2B: If you mark an invoice as Pending or Reject after 14 October, your GSTR-2B does not update on its own. You must manually click the Recompute GSTR-2B button on the IMS dashboard before opening GSTR-3B.
• Relying on supplier views: While suppliers can see recipient actions in their "Supplier View", they cannot see your internal purchase register. If you let a wrong bill get deemed accepted, the supplier assumes the transaction was valid.

Related guides

• IMS pending invoices: supplier credit rating and GST impact
• IMS reject invoice in GSTR-2B: statutory consequences and supplier action
• IMS action on amended invoices: how supplier GSTR-1A changes reset your GSTR-2B
• IMS reset action and recomputing GSTR-2B: timing rules and portal workflow

Frequently asked questions

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Last checked: 17 October 2026. Sources used: Section 38, CGST Act, Rule 60(7), CGST Rules, GSTN Revised Advisory on IMS, Section 16, CGST Act.