Communication of details of inward supplies and input tax credit
Section 38, CGST Act
Straight from CBIC
Official source, not a summary of a summary
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Amendment history
See what changed, and when
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In one line
There is no manual inward-supply return. The portal builds your input tax credit statement, GSTR-2B, from your suppliers’ filings, splitting it into credit available and credit restricted (newly registered supplier, default in paying tax, output-tax versus credit mismatch, and the other prescribed cases). Since 1 October 2025 this runs through the Invoice Management System: you accept, reject or keep pending each invoice, and GSTR-2B is built from what you accept – so the credit you can claim is now tied to the action you take in IMS.
What this means in practice
The parts that actually decide cases — the things a practitioner checks first.
Section 38 was substituted with effect from 01-10-2025 (notified by 16/2025-Central Tax dated 17-09-2025), which is what put the Invoice Management System on a statutory footing.
You can still act on records in IMS after GSTR-2B is generated and up to filing GSTR-3B, and regenerate GSTR-2B – but once GSTR-3B is filed the position is locked for that period.
Rejecting a record has consequences for the supplier, so reject only with a reason on file; ‘pending’ is the right action for a disputed or not-yet-received supply.
Section 38 restricts credit; it does not grant it. The conditions of section 16(2) still have to be met independently.
Questions people actually ask
Real questions we get on this provision, answered straight.
Do I have to act on every invoice in IMS every month?+
No action is treated as deemed acceptance, so an invoice you leave alone flows into GSTR-2B. But you must actively reject or keep pending anything you do not want in your credit – the credit you claim is now measured against your IMS actions.
How this provision is built
The skeleton, clause by clause — useful when a notice cites a specific sub-clause.
The exact words of the law
986 characters, uneditedReproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.
Read the full provision+
(1) The details of outward supplies furnished under s.37(1), and of such other supplies as prescribed, and a statement of input tax credit shall be made available electronically to recipients in prescribed form/manner/time and subject to conditions/restrictions.
(2) The statement shall consist of –
(a) details of inward supplies in respect of which ITC may be available;
(b) details of supplies in respect of which ITC cannot be availed, wholly or partly, including on account of the said supplies being furnished under s.37(1) –
(i) by a person within a prescribed period of taking registration; (ii) by a person who has defaulted in payment of tax for a prescribed period; (iii) by a person whose output tax as per GSTR-1 exceeds output tax paid by a prescribed limit; (iv) by a person who has availed ITC exceeding that in clause
(a) by a prescribed limit;
(v) by a person who has defaulted under s.49(12); (vi) such other class as prescribed;
(c) such other details as prescribed.
High Court cases on this section
Judgments in our index that cite this provision. Being listed does not make a case good law — it may have been appealed or distinguished since. Read it before relying on it.
What changed, and when
The amendment trail, newest first — because the version that applies to your case depends on the period.
2025-10-01 · Wording of (2) amended; (2)(a) tail omitted; (2)(c) inserted
‘a statement’ wording substituted; omission in (2)(a); new clause (2)(c) ‘such other details as prescribed’. CONFIRM commencement notification.
2022-10-01 · Fully substituted – recast to auto ITC statement
Replaced the old inward-supply filing with the auto-communicated ITC statement (GSTR-2B) and the blocked-credit categories.
2017-07-01 · Commenced (as ‘Furnishing details of inward supplies’)
Original GSTR-2 machinery.
Where this comes from
Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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