The document discusses compliance rating in the GST system. It states that section 149 of the CGST Act 2017 provides for assigning compliance ratings to all registered taxpayers based on parameters like timely filing of returns, matching of transactions, adherence to timelines, and cooperation with the tax department. It is expected that higher compliance ratings will result in benefits like preferred supplier status, lower scrutiny, and potential privileges from the tax department. Compliance ratings will be calculated based on factors like prompt payment of taxes, accurate return filings, correct input tax credit usage, and audit/scrutiny findings. The objective is to incentivize and formalize business compliance under GST.

1.  promptness of paying taxes,
 timely e-filing of monthly/
quarterly returns,
 matching of transactions,
 transparent reconciliations,
 adherence to various time limits,
 cooperation in dealing with tax
department etc.
 matching of transactions, i.e., no
mismatch of invoices
 filing of regular and annual re-
turns timely and correctly
 correct utilization of input tax
credit and its disclosure
 correct deduction of TDS/TCS,
wherever applicable
 findings in scrutiny of returns/
audit findings
The objective of section 149 of CGST
Act 2017 is to provide for the assign-
ment and provision of parameters for
Good and Service Tax compliance
rating. It is expected that GST compli-
ance rating scores may be used for
identifying compliant tax payers which
may get better administrative treat-
ment or response, ascertaining risk
profile of tax payers, data integrity/
audit of tax payers records, selection
of cases for audit or scrutiny etc. It
may result in the following ad-
vantages:
• Preferred supplier chosen by
buyers
• Will ensure health competition
and enhanced compliances
• Add to good governance as-
pects of organization
• Lower or poor rating may attract
stricter scrutiny and surveillance
• Reputation built up
• Preferences/privileges by the
Department (not known now)
• May be used by banks/suppliers
as a bench mark
• Will facilitate better negotiation
with suppliers
Every taxable person irrespective of
its nature or size or turnover shall be
assigned a GST compliance rating
under the GST law for GST compli-
ances. The objective of this concept
of tax administration is to make peo-
ple fully GST compliant and on time
with the uploading of invoices and
other necessary documents.
Thus, Compliance rating scores could
be based on:
Formalizing Way of Doing Business in India
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Compliance
Rating in GST
6 Key feature of Com-
pliance Rating
• Prescribed in Law u/s
149 of CGST Act 2017
• Apply to all Registered
Person
• Automated with cer-
tain parameters
• Will be published in
Public Domain
• Will impact Vendor
Selection process in
future
• Cooperation with Tax
Department will im-
prove rating and re-
duce Litigation
Click Dive
CGST Act 2017 √
Benefit of Rating √
Global Experience √
GSTN Network √
India Brand Equity √
Invest in India √
E-Procurement by
Government of India
√
Knowledge Partner : Dr. Sanjiv Agarwal & CA Neha Somani
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