The moment Goods and Service Tax or GST took its entry to the Indian economic landscape, it swept away the ground from many well-established business owners’ feet. It was, no doubt, a tax reform. But in such a rapidly changed economic environment, the business owner could nothing do nor think except resist. It was the GST compliance rating that helped them to move their businesses to the realm of GST.
What Do You Mean By GST Compliance Rating?
One can relate GST compliance rating to the performance rating of businesses, compliant to GST. It denotes, among all the GST registered business owners, which are the most compliant to GST, regardless of the size, monthly/annual turnover, industry, etc.
Why Did Government Introduce The GST Compliance Rating?
The main intention of the Government behind the GST compliance rating scheme is to convince business owners to get registered under GST as soon as possible and maintain the tax invoices properly and accomplish the filing of GST returns on time.
Under GST, only when the seller accomplishes the filing his GSTR-1, a person becomes able to claim the input tax credit in GSTR-2. The interesting fact is that all the details regarding both of these two forms should go hand in hand with one another.
Factors Responsible For The GST Compliance Rating
- According to the monthly and annual turnover of the business owners, they have to accomplish paying their taxes on time.
- The business owners have to accomplish the filing their GST returns on time.
- The business owners need to maintain proper and errorless bookkeeping so that every tax invoices reconcile with the other.
- They must send their GST returns on time, within the due date, and cooperate with the GST authorities rightfully
Why Does GST compliance Rating Matter?
- Business Owners can get their refund instantly.
- Buyers can get the input tax credit instantly.
- No chances of the audit performed by the GST authorities.
- Enjoy a better business reputation