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GST Compliance Rating – An Overview

  • — by CA. Ena Kansal

(The author is a Practicing Chartered Accountant and a renowned Trainer with an exposure in Direct and Indirect Taxes. She has delivered several presentations at ICAI, ICSI and other professional forums on topics pertaining to GST. Author can be reached at gst@apurvkansal.co.in or 8109825451)

 (Only for Private Circulation)

The GST compliance rating is a score given by the government to a business so that other businesses can see how compliant they are with the tax department. This score will be calculated based on parameters such as timely filing of monthly and annual returns, furnishing details of input credits used, taxes paid, etc. These scores will be updated at periodic intervals, and their details will be published in a public domain that all businesses can access. This will allow small businesses to choose the most GST-compliant vendor for their business endeavors.

Compliance rating scores will be determined on basis of following factors:

  • Regular payment of taxes
  • Timely e-filing of GST returns
  • Matching of transactions of outward and inward supplies
  • Transparent Reconciliations
  • Cooperation in dealing with GST Department

A taxable person with higher rating may be given certain privileges while as a lower rating may invite enhanced surveillance. The chances for scrutiny assessment will rise and dealers with low compliance rating or rating lower than prescribed limit will be black listed.

Black Listing of Dealers

The dealers will be black listed if they have low Compliance rating. The following shortcomings may be the triggers for Black Listing:

  • Continuous default for 3 months in ITC which has been reversed
  • Continuous default in filing returns for 3 months
  • Continuous short reporting of sales beyond prescribed limit for a period of 6 months.

Even though the government hasn’t finalized all of the details about how GST compliance scores will be calculated, the steps mentioned above should give you a rough overview of how to stay compliant with the GST department.


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