Which one is correct?
- It is not matter.
- It doesn’t matter.
Can we use the first form?
Is the “matter” a noun?
The second sentence is probably the one you are looking for. (Though it should be written as ‘doesn’t’, with an apostrophe.)
‘Matter’ can be used as a noun. The first sentence you use is grammatically possible, but its meaning is quite strange. There is no ‘a’ or ‘the’ in front of ‘matter’, so it is an uncountable noun in this sentence. Uncountable ‘matter’ means ‘ the physical substance that everything in the world is made of’. As you can see, it would be strange to say ‘it is not the substance that everything in the world is made of’!
In the second sentence you use, ‘matter’ is a verb, and that is why ‘does’ is used. It means ‘it is not important’, and is very a common sentence in English.