A supplier invoice often contains both eligible and blocked input tax credit. For example, a single tax invoice might bill commercial repair services alongside catering expenses, or factory consumables alongside personal supplies. Because IMS provides only three document-level actions, accountants frequently ask how to treat an invoice with partial credit eligibility.
Why IMS does not support split acceptance
Under the Invoice Management System live on the GST portal from 1 October 2024, recipients can accept, reject, or keep pending each inward document as explained in the GSTN IMS FAQs. However, the portal allows actions only at the complete invoice level. There is no portal option to split an invoice, accept 60 percent of the tax value, and reject the remaining 40 percent.
If you mark the invoice as Pending, the entire record is excluded from that period GSTR-2B as documented in the GSTN IMS FAQs. This prevents you from taking even the valid portion of the tax credit during the current tax month. To learn more about handling open items, read our practical guide on handling pending invoices in IMS.
Common mistake: Rejecting an invoice because a portion falls under blocked credit. If you reject the invoice, your supplier receives an alert, the entire invoice drops out of your GSTR-2B, and you lose the right to claim the genuine business portion.
Reporting partial reversals in Form GSTR-3B
Section 17(5) of the CGST Act explicitly bars input tax credit on specific inward goods and services, including catering, motor vehicles, and personal consumption as outlined in Section 17 of the CGST Act.
To align IMS acceptance with statutory reporting, follow the mechanism prescribed in CBIC Circular No. 170/02/2022-GST and the GSTN GSTR-3B manual:
- Accept in IMS: Mark the supplier invoice as Accepted on the IMS dashboard.
- Auto-population: The complete invoice tax amount flows automatically into Table 4(A)(5) of your Form GSTR-3B via GSTR-2B.
- Table 4(B)(1) reversal: Calculate the blocked portion and enter it under Table 4(B)(1) as a permanent, non-reclaimable reversal.
- Net eligible credit: Table 4(C) automatically reflects net ITC, leaving only the allowable sum to offset output liability.
Worked calculation for a mixed supply invoice
Consider an enterprise receiving an invoice from a facility vendor for plant maintenance and executive refreshments. The total tax on the invoice is ₹50,000, consisting of ₹35,000 for plant machinery servicing and ₹15,000 for outdoor food catering blocked under Section 17(5)(b)(i).
| Item description | Taxable value | GST (18%) | ITC status under Section 17(5) |
|---|---|---|---|
| Plant machinery repair | ₹1,94,444 | ₹35,000 | Eligible in Table 4(A)(5) |
| Executive catering supply | ₹83,333 | ₹15,000 | Blocked under Section 17(5)(b)(i) |
| Invoice total | ₹2,77,777 | ₹50,000 | Accepted in full on IMS |
The accountant executes the return disclosures as follows:
- Step 1: IMS Action: Mark invoice as Accepted. Total GST of ₹50,000 flows into GSTR-2B.
- Step 2: Table 4(A)(5) Input Tax Credit Available: ₹50,000 (all other ITC).
- Step 3: Table 4(B)(1) Reversals: Enter ₹15,000 (reversal as per Rule 38, 42 and 43 and Section 17(5)).
- Step 4: Table 4(C) Net ITC: Formula is Table 4(A) minus Table 4(B): ₹50,000 minus ₹15,000 = ₹35,000.
When should you actually use Pending?
Keeping an invoice Pending is intended for operational discrepancies, not statutory ITC restrictions. Use the Pending action in IMS only when:
- The underlying goods or services have not yet been received at your factory or warehouse.
- The physical invoice is undergoing internal commercial verification or price checks.
- You are waiting for the supplier to issue a debit or credit note for quantity variances.
If the goods or services have been received and the invoice is commercially verified, accept the record in IMS. Segregate the blocked tax in your books of account, and reverse it via Table 4(B)(1).
Frequently asked questions
Can you accept only part of an invoice in IMS?
No. The Invoice Management System operates at document level. You can only choose Accept, Reject, or Pending for the entire invoice value.
Where should the blocked portion of ITC be reversed in GSTR-3B?
Permanent blocked credit under Section 17(5) is reported in Table 4(B)(1) as an absolute reversal that cannot be reclaimed.
What happens if you mark a partially eligible invoice as Pending in IMS?
Marking an invoice Pending excludes the entire invoice from that tax period's GSTR-2B, delaying even the eligible input tax credit.
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Last checked: 26 October 2026. Sources: GSTN IMS FAQs, CBIC Circular No. 170/02/2022-GST, Section 17(5), CGST Act.