Taxpayers registered under the new goods and services tax (GST) regime that is set to be implemented from 1 July will be assigned a rating, based on how promptly they upload invoices, pay taxes and file returns.

The ratings will be made public on the GST Network (GSTN) website as tax authorities seek to build peer pressure among companies to ensure compliance.

The rules that govern the new indirect tax regime require the matching of invoices for claiming input tax credit. This means that in case two suppliers offer the same price to the manufacturer, the company may opt for the one that has a better compliance rating.

GST, a destination-based tax, is one of the most ambitious tax reforms that India has undertaken. It will subsume a host of indirect taxes being levied by the central and the state governments, including excise duty, service tax, value-added tax, entertainment tax, luxury tax and entry tax. Under GST, the entire system of tax return filing, invoice uploading and tax payment will be online through the GSTN—the information technology backbone of GST.

Regularity in uploading the invoices, filing of returns and taxes will be the main criterion for rating the taxpayers. The ratings will be updated at periodic intervals and also will be put up in the public domain.