Clarification on GST IMS: Rejection of Invoice & Credit Note and ITC Claim on Subsequent Invoice

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This query is : Resolved

Manjunath Reddy Pessani (Querist)
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25 November 2025 Dear CA Club Members,I am facing a situation related to the GST Invoice Management System (IMS) and would appreciate your expert guidance.We recently rejected a supplier's invoice and the corresponding credit note in the IMS due to discrepancies. Following this, the supplier raised a new invoice for the same transaction, and we have claimed Input Tax Credit (ITC) on this new invoice.My queries are:What are the specific implications for GST compliance and tax reporting when both the original invoice and credit note are rejected by the recipient in IMS?Since we have claimed ITC on the newly raised invoice after rejecting the earlier documents, how should the supplier handle their GST liability and reporting? Are there any risks of duplication or mismatches in the GST returns of the supplier and recipient?What is the recommended best practice for coordinating such cases between supplier and recipient to ensure smooth reconciliation and compliance under GST IMS?Are there any special considerations related to reversal or adjustment of ITC for the rejected documents once the new invoice is accepted?Any detailed insights, experiences, or references to relevant GST provisions and updates would be highly valuable.Thank you in advance for your support

Ram Avtar Singh

Ram Avtar Singh (Expert)
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25 November 2025 In the Future, do not reject. Keep pending, you will get one month time for clarification from the party. Only the accepted invoice will be considered in GSTR3B. Not rejected the Invoice.

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