GST Returns in 2026: IMS, Locked GSTR-3B, the Three-Year Bar and the New Rate Structure

Monthly GST compliance has changed considerably since 2024. Businesses still filing returns the way they did in 2020 are likely to lose input tax credit or receive demand notices. Here are the main changes and how to adapt.

1. Invoice Management System (IMS)

From October 2024, every invoice uploaded by your suppliers appears in IMS on the GST portal. For each invoice, you can accept, reject or keep pending:

• Accepted and deemed-accepted invoices flow into your GSTR-2B and are available as credit.
• Rejected invoices are excluded, and the supplier must correct them.
• Pending invoices are carried forward, within time limits.

If you take no action, an invoice is deemed accepted. That sounds convenient, but it means wrong or duplicate invoices also flow into your credit unless you check them. Review IMS before the GSTR-2B cut-off each month.

2. GSTR-3B is now locked from GSTR-1

The outward tax liability in GSTR-3B is auto-populated from GSTR-1 / IFF and is not editable in GSTR-3B. Errors in sales reporting must be corrected through GSTR-1A, which is filed after GSTR-1 and before GSTR-3B for the same period. Corrections are therefore needed earlier in the month than before.

3. Three-year time bar on returns

From July 2025, GSTR-1, GSTR-3B, GSTR-4, GSTR-9 and certain other returns cannot be filed after three years from their due date. A business with old pending returns, for example from years when it was inactive, must clear them before they become permanently unfileable. Unfiled returns can block cancellation of registration and invite best-judgement assessment.

4. GST 2.0 rate structure

From 22 September 2025, the GST Council rationalised rates into two main slabs, 5% and 18%, with a 40% rate for specified luxury and sin goods. The earlier 12% and 28% slabs were largely removed. Businesses need to:

• update item masters and HSN-wise rates in billing software
• review the transition for stock and contracts that straddled the rate change
• revisit pricing and anti-profiteering exposure where rates fell
• check whether input tax credit accumulates because of an inverted duty structure, and whether a refund is available

E-invoicing reminders

• E-invoicing applies to businesses whose aggregate turnover exceeded ₹5 crore in any year from 2017-18.
• Businesses with turnover of ₹10 crore and above must report invoices to the IRP within 30 days of the invoice date. Invoices reported later are rejected. The IRN cannot be generated, and the invoice is not valid for the buyer's credit.

A monthly reconciliation routine

1. By the 5th – review IMS and follow up with suppliers on missing or incorrect invoices.
2. By the 10th – reconcile sales with e-invoices and e-way bills, then file GSTR-1.
3. By the 14th – review GSTR-2B against the purchase register, and reverse ineligible or blocked credit.
4. By the 20th – file GSTR-3B after paying tax. Use the electronic credit ledger before cash, within the credit-utilisation restrictions.
5. Quarterly – check vendors' return filing status, and hold payment of the GST component to persistent non-filers.

Annual return

GSTR-9 is due by 31 December following the financial year. It is optional for taxpayers with turnover up to ₹2 crore. GSTR-9C, the self-certified reconciliation statement, applies above ₹5 crore. Reconcile GST data with the audited accounts before filing, because the annual return is the department's primary scrutiny tool.

The information in this article reflects the law as on the date of publication and is for general guidance only.