Taxpayers to be rated on GST compliance

gst-bill and taxpayers ratings

As per the new goods and services tax (GST) regime, taxpayers who have registered to be part of the same will now be rated on the basis of how compliant they are with said taxation structure. The regime is set to come into action from July 1. The ratings are expected to be assigned on the basis of factors such as how quickly they are uploading the invoices, filing returns, and paying taxes. The ratings will be published on the website of the GST Network (GSTN). Tax authorities are looking to use the ratings in order to create peer pressure among companies so that they comply with the same.

The rules

As per the rules of the new structure invoices will have to be matched by taxpayers in order to claim input tax credit. As an example it can be said that a manufacturer who gets goods from a supplier will be unable to claim credit for the tax he has paid till the time the seller uploads the invoices and the claims made by the manufacturer, as well as the supplier, are tallied. This also implies that in case two suppliers were to offer the same rates, a company will always choose the one that has a better rating for compliance.

Importance of input tax credit

According to the Chief Executive Officer (CEO) of, Archit Gupta, input tax credit forms a critical part of the working capital of different firms. Cleartax has already helped a number of companies file their taxes in accordance with the GST requirements. So, it can jolly well be assumed that companies that are more compliant will always get the nod over ones that are either not compliant or compliant to a lesser degree since doing business with such companies will increase one’s chance of getting the input tax credit in the shortest-possible time.

Track record

According to Hasmukh Adhia, Revenue Secretary, business will also be rated on the basis of their previous track record. This will include businessmen and traders as well. It is expected that as and when the tax ratings are made public on the GSTN website a lot of businesses may face problems because of their lack of compliance. GSTN is the organization that has been tasked with the responsibility of creating the information technology (IT) structure of said programme. The processes that are to be followed for providing compliance ratings are expected to be approved in due time by the GST Council.

An equal footing      

As per Prakash Kumar, the CEO of GTN, the system would start off by placing all entities at the same level and it is on basis of future tax compliance that the ratings will move either north or south. This rating is a lot similar to what the Credit Information Bureau (India) Limited (CIBIL) does with borrowers – rating them on the basis of their credit history. The rating is expected to show the taxpayer’s name alongwith the GST identification number (GSTIN). Bihar and Telangana have already sanctioned the State GST Bill (SGST) and Rajasthan is expected to follow suit as well.


Read More About  GST

What is GST?
How to register for GST?
Various Goods and Services Tax forms
GST Rule Changes
Implementation of the GST in India
Costlier Or Cheaper Under GST?