Trade and industry will be assigned a ‘compliance rating’ based on their credibility with regard to timely deposit of taxes to the exchequer and filing of returns under the goods and services tax structure.
Revenue Secretary Hasmukh Adhia said a system of GST Compliance Rating will be put in place so that every trader or businessman will be rated based on their track record. Once the rating is made public on the GSTN portal, a businessman can decide on whether to deal with another trader or entity who does not deposit tax with the government and therefore, has a low compliance score.
GST Network (GSTN) is the firm which is building the IT backbone of the unified tax, which is scheduled to go into effect from July 1. The GST Council in due course will approve the procedures to be followed for compliance rating and it will mostly depend on how a trader or business entity has complied with filing returns and other requirements under the Act, GSTN CEO Prakash Kumar said.
“We will start with by putting everyone at equal level, but if a taxpayer is non-compliant, then only your rating will go down,” Kumar explained. A GST compliance rating somewhat mirrors the credit score that CIBIl provides based on the credit history of a borrower. The score is a three-digit numeric summary and depends on an individual's credit payment history across bank loans and credit institutions over time. The Central GST Act as passed by Parliament also provides thatevery registered person may be assigned a goods and services tax compliance score by the government based on his record of compliance with the provisions of this Act.
The parameters for determining the rating score are yet to be prescribed. The rating will provide the name of the taxpayer as well as the GST Identification Number (GSTIN). Speaking to reporters at the GST Conclave here, Adhia further said all efforts are being made to roll out GST from July 1 and the industry too should brace for it.