GST in 2026: IMS, ITC reversal rules and what businesses must fix

The Invoice Management System (IMS) went from optional to central. If your team isn't actioning IMS every month, you're either losing ITC or inviting notices.

What IMS actually does

Every invoice your supplier files in GSTR-1 lands in your IMS dashboard. You must accept, reject or keep pending. Only accepted invoices flow into your GSTR-2B — and only 2B ITC is claimable in GSTR-3B.

New rule 37A + section 16(2)(c)

If the supplier doesn't pay tax by 30 September of the following year, you must reverse the ITC in the very next 3B. Auto-reversals mean you now need reconciliation running monthly, not annually.

The practical fix

• Assign IMS review to a specific person by the 12th of each month
• Reconcile purchase register vs 2B before filing 3B
• Chase suppliers whose invoices don't appear by the 14th
• Move to accrual bookkeeping if you haven't — cash-basis breaks under IMS

If ITC leakage is more than 1–2% of your GST outflow, the process needs a rethink — not more effort.