When reconciliation between your purchase register and the GST portal reveals unreceived consignments or document mismatches, selecting Pending on the Invoice Management System provides breathing room. However, this action does not exist in isolation. For the supplier who has already discharged output tax in their monthly return, an invoice marked Pending means delayed payment, disputed credit terms, and operational tension. Understanding the statutory framework and commercial ripple effects helps finance teams resolve inward queries without disrupting key supplier relationships.
Statutory GST compliance rating under Section 149
The concept of a formal vendor score is rooted in statute. Under Section 149 of the CGST Act, the government may assign a Goods and Services Tax compliance rating score to every registered person based on their record of compliance with the provisions of the Act. This score is designed to be updated at periodic intervals, intimated to the taxpayer, and placed in the public domain.
In practice, the government has not yet activated a public 1 to 10 numerical score on the GST portal. However, enterprise procurement teams, non-banking financial companies, and commercial supply-chain financiers have built private GST scoring models. These algorithms pull filing timeliness from public GST portal search data and cross-reference inward reconciliation friction from corporate ERP systems. When a supplier repeatedly sees invoices flagged as Pending or disputed by buyers, corporate vendor scoring systems downgrade the supplier reliability tier.
Statutory provision: Section 149(1) of the CGST Act specifies that every registered person may be assigned a compliance rating score based on adherence to statutory requirements such as timely outward reporting in GSTR-1 and tax discharge in GSTR-3B.
How IMS pending status functions under Rule 60(7) and GSTN rules
To understand the financial friction, consider the mechanical workflow on the common portal. Under Rule 60(7) of the CGST Rules, Form GSTR-2B is an auto-generated statement of input tax credit communicated to the recipient based on outward filings by suppliers between successive GSTR-1 cutoff dates.
With the rollout of the Invoice Management System, the recipient can actively intervene on these records. As clarified in the official GSTN Advisory on IMS Additional FAQs dated 17 October 2024, taxpayers have three operational choices for inward supplies: Accept, Reject, or keep Pending. When a recipient marks an invoice as Pending:
- Exclusion from current GSTR-2B: The pending invoice is excluded from the recipient Form GSTR-2B for that tax period. Input tax credit does not populate into Table 4(A)(5) of Form GSTR-3B.
- Automatic rollover: The transaction remains on the IMS dashboard and carries forward automatically to subsequent tax periods. You do not need to ask the vendor to re-upload the document in a future GSTR-1.
- Prevention of deemed acceptance: Taking an affirmative Pending action prevents the system from treating the invoice as deemed accepted under IMS deeming provisions when Form GSTR-3B is filed.
- Credit note restriction: Per question 10 of the GSTN release from October 2024, credit notes cannot be kept pending because the supplier has already reduced output liability at issuance.
For an in-depth breakdown of multi-month carry-forward mechanics, review our guide on IMS pending action carry forward rules.
Recipient withholding practices and supplier cashflow disruption
Why do recipients mark invoices as Pending instead of accepting them immediately? The primary legal reason is Section 16(2)(b) of the CGST Act, which mandates that no registered person shall take input tax credit unless they have received the goods or services. If an invoice is uploaded by a supplier on the 10th of the month but the delivery consignment reaches the factory on the 22nd, accepting the credit in the previous month return creates an irregular ITC claim.
Consequently, standard commercial accounting practice aligns payment terms with portal acceptance:
- The recipient accounts payable team flags the invoice as Pending on IMS to prevent claiming premature ITC under Section 16(2)(b).
- Enterprise ERP systems place a payment block on the vendor ledger until the warehouse logs physical goods receipt note (GRN) verification.
- The supplier, having already filed Form GSTR-1 and paid the output tax in cash or credit, faces a double liquidity pinch: unpaid sales proceeds and out-of-pocket tax discharge.
For a detailed analysis of balancing transit delays against supplier payment terms, read our guide on IMS accept vs pending action for supplier payments.
Commercial risk: Keeping invoices pending for extended periods ties up vendor working capital. If the delay extends past 180 days from the invoice date, the recipient must also monitor the second proviso to Section 16(2) and Rule 37 to ensure payments and credits do not trigger mandatory reversal with interest.
Contrast: pending action versus outright rejection
Finance teams must carefully differentiate between marking an invoice as Pending and marking it as Rejected. The operational and legal consequences differ significantly.
| Feature | IMS Pending action | IMS Reject action |
|---|---|---|
| ITC impact | Deferred to a future tax period | Completely denied to recipient |
| Next month status | Rolls over automatically on IMS dashboard | Does not roll over; requires supplier amendment |
| Supplier action required | None; recipient accepts once goods arrive | Supplier must amend via GSTR-1A or next GSTR-1 |
| Appropriate use case | Goods in transit, unverified quantity, price hold | Wrong GSTIN, duplicate invoice, fictitious bill |
Outright rejection should be reserved for structural errors such as incorrect GSTIN or unauthorized billing. For standard operational delays, Pending preserves the transaction record without forcing the supplier into tedious GSTR-1 amendment cycles.
Worked example: vendor working capital impact across two return periods
Consider a practical manufacturing scenario. Apex Fabricators Ltd in Pune orders precision tooling worth ₹10,00,000 plus 18% IGST (₹1,80,000) from Precision Tools Pvt Ltd in Bengaluru. The total invoice value is ₹11,80,000. The invoice date is 29 October 2026.
Precision Tools files Form GSTR-1 on 10 November 2026 and discharges the ₹1,80,000 tax liability when filing Form GSTR-3B on 18 November 2026. The shipment faces transport delays and arrives at Apex Fabricators on 23 November 2026, three days after the October GSTR-3B filing due date on 20 November 2026.
| Stage and tax period | Supplier cashflow | Recipient IMS action | Recipient GSTR-2B | Net financial effect |
|---|---|---|---|---|
| October 2026 return (due 20 Nov 2026) | Outflow: ₹1,80,000 tax paid; ₹0 received | Flagged Pending (goods in transit) | ₹0 ITC auto-populated | Supplier funds ₹1,80,000 tax out of pocket; payment blocked |
| Warehouse verification (24 Nov 2026) | Pending GRN inspection | Action updated from Pending to Accept | Pending next run | Goods verified, commercial hold released for billing |
| November 2026 return (due 20 Dec 2026) | Inflow: ₹11,80,000 full invoice settled | Accepted record included | ₹1,80,000 ITC auto-populated | Apex claims full ITC; Precision Tools recovers liquidity |
In this scenario, Precision Tools carried a ₹1,80,000 working capital deficit for 32 days because the invoice was kept Pending across the October return cutoff. If this pattern repeats across multiple clients, the supplier faces significant credit stress.
Commercial reconciliation agreements and vendor SOPs
To prevent working capital blockages while protecting recipient ITC, businesses should establish formal reconciliation standard operating procedures (SOPs). Well-structured vendor agreements typically include three key clauses:
- Outward reporting window: Suppliers agree to upload and file outward supplies by the 8th or 9th of each month, giving buyers adequate time to reconcile against physical receipts before the 14th GSTR-2B generation.
- Dispute intimation protocol: The buyer agrees to notify the supplier within 48 hours of marking an invoice Pending on IMS, specifying the exact commercial reason (such as short delivery or damaged packaging).
- Payment milestone separation: For long-lead deliveries, contracts can permit payment of the base taxable value against proof of dispatch, while withholding only the tax component until the invoice is accepted on IMS and reflected in Form GSTR-2B.
For related guidance on verifying vendor tax payments and managing compliance risks, refer to our article on IMS recipient acceptance and supplier tax unpaid risk.
Related guides
- IMS portal communication to suppliers on rejected or pending invoices: step-by-step SOP
- IMS action on amended invoices: how supplier GSTR-1A changes reset your GSTR-2B
- Why are my invoices stuck in IMS Pending, and what does it cost
- Can You Keep Credit Notes Pending in IMS? The October 2025 GSTN Rule Changes Explained
Frequently asked questions
Does marking an invoice as Pending lower the supplier official GST rating on the portal?
No. While Section 149 of the CGST Act provides for an official compliance rating score based on statutory compliance records, recipient actions on IMS do not currently reduce a published portal rating. However, enterprise buyers and automated vendor risk tools track pending rates as internal compliance performance scores, which can downgrade supplier credit terms.
How does an IMS pending invoice roll over to the subsequent month?
When you mark an invoice Pending, it is excluded from your current Form GSTR-2B. Under GSTN IMS rules, the record remains in your IMS dashboard and carries forward automatically to subsequent tax periods until you take an action to accept or reject it, or until the statutory cutoff under Section 16(4) arrives.
Can a recipient mark a credit note as Pending on IMS?
No. Per the official GSTN guidance released on 17 October 2024, credit notes cannot be kept pending by the recipient because the supplier has already reduced outward tax liability upon issuance. The recipient may only accept or reject a credit note.
What happens to supplier working capital when an invoice is marked Pending?
The supplier has already paid output tax to the government upon filing Form GSTR-1 and GSTR-3B. If the recipient withholds invoice settlement until delivery verification and IMS acceptance, the supplier suffers cashflow disruption, bearing the unrecovered tax amount until the recipient releases the payment.
Identify IMS pending invoices instantly
Reconcile your purchase register against Form GSTR-2B to see pending, accepted, and missing invoices with exact tax amounts. Your GSTR-2B and purchase register files are read in your browser and never uploaded to any server.
Last checked: 19 October 2026. Sources: CBIC CGST Act Section 149, CBIC CGST Rules Rule 60(7), GSTN IMS Advisory and Additional FAQs dated 17 October 2024.