Compliance Rating is a score given to the businesses based on their overall compliance with GST – if they have filed Returns on time, timely payment of taxes, compliance with other rules and regulations under GST etc. The compliance mechanism is like a performance parameter, based on our GST Compliance, and most importantly, it will be visible in the public domain. Why is Compliance Rating important?
Keeping in mind the fact that the compliance rating of every bussiness will be available in the public domain, businesses will prefer to trade with the fellow businesses having a high rating. The fact that businesses will not prefer to trade with businesses having a low compliance rating — is not confusing. Why would a taxpayer deal with a taxpayer who is not filing his returns on time, not paying his due taxes — who is not GST compliant. Businesses like GSTBlue , that continue to fare poorly will also be blacklisted and will find it extremely difficult to gain the trust of Government and other businesses.
High GST Compliance Rating will actively attract other businesses towards you, just as a low rating will discourage fellow taxpayers to trade with you. This is not exactly rocket science — if a business is comparing two other businesses that are offering goods at the same price, but they have different compliance ratings. Then the business will opt for the one that has a better compliance rating. Traders will find it undesirable to do business with someone who may cause problems with the ITT cycle, thus costing them money.
If you have a high compliance rating, then Input Tax Credit (ITC) will be issued to you quickly. Also, as refund claims will be processed on a merit basis, businesses with high compliance rating can expect their refund claims to be dealt with quickly. Thus, the treatment you receive from the GST authorities will be in accordance with your GST compliance rating.
Every registered business’ GST compliance rating will be available for peruse in the public domain. If the compliance rating is high, it gives a strong message to the business community that the particular business is trustworthy and that doing business with them will not turn out to be a mistake.
The system of GST Compliance Rating has the potential to make or break your game. During the initial period, the Compliance Rating mechanism may seem to be strict and a little difficult to understand, it will inevitably herald a much-needed reformation in the Indian Tax culture and assist in creating a more transparent economy.
To understand how our GST Compliance Solution will help you achieve the perfect GST Compliance Rating, Contact us.