Importance of GST Compliance Rating & How to maintain it?


Date: 13 May 2021

Importance of GST Compliance Rating & How to maintain it?

GST compliance rating and performance ranking of each registered tax-paying individual. This is regardless of the size, turnover, or nature of your business. The rating system could be between 1 to 10, where 1 is the least compliant and 10 being the highest.

For maintaining GST compliance and following the rules given by the ministry, use GST software. A manual approach to GST guidelines can become burdensome, while even a tiny mistake could expose you to unforeseen penalties. 


The reason why staying GST compliant is necessary and get a high rating

The GST law states that when buyers want to claim input credit for the purchased goods, submitting the GST transactions of paid goods is vital. 


Suppose vendor 1 purchases products from producer 2 and updates all the sales transactions on GSTR-1. This data will now be auto-filled in the transactions’ list in the vendor’s GSTR-2 by using GSTR-1 filed by the buyer. The vendor will be allowed to claim the input via GSTR-2.

But, if Producer 2 was not paying back his dues, then their tax return will not be considered valid by the GST body under Section 27(3). This action will not allow the vendor to submit a valid GSTR-2, resulting in not claiming their input tax credit. 

In case the same producer is supplying products to many local vendors. Then none of them would claim the input tax credit because their producer failed to pay their dues.  Even though this was just an example, the point remains unchanged. Only one discrepancy in a business can impact the entire supply chain. 

How BUSY Software can help you?

BUSY Software allows you to maintain, claim, and follow up on GST compliance details. This Software helps you check vendors with the best track records so that you do not invest with sellers who don’t have a high GST compliance rate. This will help people to choose GST-compliant people right from the beginning. 

The buyer’s chance of claiming the input tax credit increases with the buyer’s compliance score. Additionally, you will be able to keep all your records in one place without misplacing them. BUSY Software is also available in a mobile app that allows you to generate invoices from your phone. 


How does the GST rating work?

The GST Rating, according to experts, works critically. The following fields are taken into account for giving the compliance ratings:

  • Filing return on time 
  • Reconciliations on time 
  • Paying taxes on time
  • Cooperating with the authoritarian body of GST 
  • Being compliant with different time frames provided by GST 

These GST actions can quickly be done using GST Software without mistake. 


The benefits of GST compliance rating 

  • A few benefits that GST compliant vendors might be entitled to are-
  • Attracting more potential businesses
  • Immediate refund generation 
  • Fewer chances of an audit conducted by the tax authorities
  • A positive reputation in the industry
  • Direct input tax credit for buyers 

A well-maintained GST invoice software always helps businesses to keep track of every transaction being made. 


Maintain GST Compliance in these 3 Steps

A business owner needs to understand the importance of GST compliance; however, that is not all. You will have to know how you can be GST compliant to maintain a good score. 

  • Timely file GSTR-1 and GSTR-2 for your business - The businesses must keep their supply transactions updated on GSTR-1 and GSTR-2 every month. You should file your GSTR-1 and GSTR-2 in a specific month by the 10th and 15th of the following month, respectively.

  • Provide details on Annual Return - Along with filling the GSTR-1 and GSTR-2 every month, the businesses must also provide a synthesized annual return known as the GSTR-9. Use GST software for accuracy, as manual records could create confusion. Electronically, distributed invoices and bills can easily be tracked. Additionally, each data will be auto-populated on the GST Software.

  • Ensure your tax dues are paid - Businesses should pay all their tax dues before filing the following tax returns. Section 27(3) of the GST legislation states that the subsequent return filed will not be valid if a business has tax dues. The compliance rating of a company will drastically reduce and trigger a discrepancy in the rest of the supply chain. Even the other buyers in the chain will not be able to claim their input credits as well. 



If your business is GST compliant, you should consider moving up your game and maintaining a clean chit from the first day. This will help you to stay away from unnecessary problems directed by the GST regulatory body. If you are interested in investing in GST Software, you must look at the different plans that BUSY Software offers. 

BUSY has a solution for every business. It helps individuals maintain a flawless GST filling and could be used to update GSTR-1 and GSTR-2. Apart from GST, BUSY will also provide for your other accounting requirements. It has the potential to become an all-in-one solution. This is your shot to boost your business by making financial processes hassle-free.