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How to improve your GST compliance rating and why does it matter?
Subhasmita Behera
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GST Compliance Rating is a system designed to evaluate if a company complies with the Goods and Services Tax (GST) regime. Implemented by the Indian government in 2017, the compliance rating applies to all taxable businesses regardless of size and type.

Under this system, businesses are ranked on a scale of 1 to 10 with 1 being the lowest rating. The ranking is based on their efficiency in filing GST returns and payments. You can take the help of companies that provide tax and accounting services to acquire a good compliance rating.

The purpose of the rating system is to encourage companies to comply with the GST law through transparency and fairness. Companies with higher compliance ratings get a series of benefits like:

  • Rapid GST refund processing
  • Access to credit lines
  • Improved business opportunities

You can check your rating by logging in to the GST website using your GSTIN (Goods and Services Tax Identification Number) and registered mobile number.

Why Does A Good Compliance Rating Matter?

The GST body updates the compliance rating at regular intervals. Although upgrading your rating has multiple advantages, most businesses fail to prioritize it due to several regulations involved. Quite a few tax and accounting service providers can assist you in navigating these challenges. We have listed a few of the advantages that a high compliance score can earn for you.

  • A high GST compliance rating will work as a badge of trust for your business, enhancing its reputation. By showing that you are trustworthy, you can attract more customers and increase your revenue.
  • Being compliant with GST regulations will help in avoiding unnecessary fines and sanctions. It will ultimately reduce your operational costs and keep your cash flow healthy.
  • Businesses can use their compliance rating to negotiate interest rates when accessing credit lines. A better compliance rating can open several business opportunities with other brands willing to associate with you.

How to Improve Your Compliance Rating?

While we discussed the benefits of having a good compliance rating, not complying with the regulations could lead to fines and government scrutiny. Due to the complexity of the process, small businesses may feel burdened by the process. They can instead seek the help of a company that provides tax and accounting services. Regardless, we have listed three easy steps to ensure you stay on track with the rating system.

File your GST returns on time

Businesses are required to report their entire sales and revenue to the GST body through GSTR-1 and GSTR 3B. These submissions are required to be made on the 10th and 15th of the following month respectively. In addition to these two forms, you must also submit your annual tax returns through GSTR-9. The filings must be done on time and without delays. Failure to do so could open your company to audits and other actions.

The Government publishes the GST rating in the open so that anyone can see your company’s rating. It is aimed at motivating dealers to associate with complying businesses. To ensure that you submit the files on time and without hiccups, you can associate with a tax and accounting services provider.

Keep track of your ratings

As mentioned earlier, compliance ratings are updated regularly. Therefore, you cannot relax once you get a good rating. It is a continuous process and one that should become a part of your accounting culture. As a business owner checking the rating at regular intervals could keep you in touch with the reality and assess how well your accounts are being handled. This is especially important when you outsource GST compliances to a tax and accounting services provider like TaxSpanner.

Avoid cutting corners when paying taxes

Ensuring that you pay your tax dues on time is one of the most essential steps in maintaining a good compliance rating. Before you initiate tax filings for the year, you must pay off the outstanding taxes for the year before. As per the regulations, even if you submit GST returns without clearing the dues, it will be considered ineligible. Also, avoid trying to find loopholes or apply tactics to reduce your tax liability, which could put your business in trouble. Be honest and clear about your details with your tax and accounting service provider when submitting GST returns.


GST is considered a turn of new-age business approach, and the compliance rating is a valuable tool for companies to enhance their standing in the industry. A good rating doesn’t just indicate your compliance but also exhibits your trustworthiness and reliability when dealing with associates and partners. It might seem challenging to understand GST rules and mandates, especially if you are a new business owner. Instead of running into any roadblocks, you can partner with a tax and accounting service provider like TaxSpanner to help you through your GST journey. We can help you understand how to register for GST, calculate taxes, file returns, and maintain records. Furthermore, we can provide advice regarding any tax-related queries you may have.

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