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Goods and Services Tax (GST) and Corporate Tax Planning · Overview of Goods and Services Tax

GST Compliance Rating under Section 149 of CGST Act

Updated 11 October 2026 · Fact-checked

GST compliance rating is a score the Government may assign to a registered person based on his record of compliance with the CGST Act. Section 149 says parameters are prescribed, the score may be updated periodically, intimated to the person and placed in the public domain. In answers, state provision, apply facts, conclude.

Understand Goods and Services Tax Compliance Rating

Every registered person has obligations under GST: filing returns, paying tax, keeping records and claiming credit correctly. Section 149 lets the Government measure how well a person meets them and express it as a compliance rating score.

The section is enabling, not mandatory. Read the words carefully: a registered person may be assigned a score by the Government, based on his record of compliance with the provisions of the Act. So the score reflects behaviour under the Act, not turnover or profit.

The score is determined on the basis of such parameters as may be prescribed. The section itself does not list the parameters. If an exam question asks how the score is calculated, say that the parameters are to be prescribed, and do not invent weights or formulas.

The score may be updated at periodic intervals and intimated to the registered person. It may also be placed in the public domain in the prescribed manner. This is the commercial point: buyers can see the rating of a supplier, and a poor rating may make business partners cautious, because a supplier's default can affect the recipient's input tax credit.

For a company secretary, the practical use is advisory. You guide the company to keep returns, payments and records in order so that the rating stays strong, and you may use the rating of suppliers when selecting vendors.

Key rules to remember

Section 149(1): assignment of score
Registered person → may be assigned a GST compliance rating score by the Government, based on his record of compliance with the Act
The word is 'may'. It applies to a registered person, and the basis is compliance record.
Section 149(2): parameters
Score determined on such parameters as may be prescribed
The Act does not list the parameters. Do not state a formula or weights.
Section 149(3): updating and publication
Score may be updated at periodic intervals + intimated to the registered person + placed in the public domain in the prescribed manner
Remember three actions: update, intimate, publish.

How to solve Goods and Services Tax Compliance Rating questions

Use this method for any question on section 149, whether theory or a short case.

  1. 1Identify the person. Check that he is a registered person, since section 149 speaks only of a registered person.
  2. 2State the rule: the Government may assign a compliance rating score based on his record of compliance with the Act.
  3. 3State how the score is fixed: on prescribed parameters, which the section does not list.
  4. 4Apply the facts, such as late returns, non-payment or clean record, as examples of compliance record, without inventing numbers.
  5. 5State the follow-up: the score may be updated periodically, intimated to the person and placed in the public domain.
  6. 6Conclude with the practical effect, such as reputation and vendor selection, and advise on remedial compliance.

Quickest way: Three-part recall for section 149

When to use it: When you have a few minutes for a short-note or a theory question.

  1. Write sub-section (1): who and on what basis (registered person, compliance record).
  2. Write sub-section (2): parameters as prescribed.
  3. Write sub-section (3): periodic update, intimation, public domain.
  4. Add one line on business impact and close.

Common mistakes in Goods and Services Tax Compliance Rating

  • Saying the rating is compulsory for every person

    Students overlook the word 'may' in the section.

    Fix: Write that a registered person 'may be assigned' a score by the Government.

  • Giving a formula or weights for calculating the score

    Students want a numerical answer for a 'how is it calculated' question.

    Fix: Say the score is determined on such parameters as may be prescribed. Do not invent parameters.

  • Applying the rating to unregistered persons

    Confusing it with general taxpayer information.

    Fix: Section 149 applies to a registered person only.

  • Forgetting the public domain element

    Students stop at assignment of the score.

    Fix: Always add that the score may be updated periodically, intimated to the person and placed in the public domain.

  • Saying the rating is based on turnover or tax paid

    Assuming bigger taxpayers get better ratings.

    Fix: The basis is the record of compliance with the provisions of the Act.

Worked examples

Example 1

Sunrise Textiles Pvt Ltd, a registered person in Surat, asks you what its GST compliance rating is, who decides it and whether customers can see it. Advise.

Show the solution
  1. Provision: under section 149(1) a registered person may be assigned a compliance rating score by the Government.
  2. Basis: the score rests on the company's record of compliance with the provisions of the CGST Act.
  3. Parameters: section 149(2) says they are those prescribed, so the company should check the prescribed rules.
  4. Publication: section 149(3) allows the score to be updated periodically, intimated to the company and placed in the public domain in the prescribed manner.
  5. Conclusion: the Government assigns the score, and customers may see it where it is published.

Answer: The Government may assign the score based on Sunrise Textiles' compliance record under prescribed parameters, update it periodically, intimate it to the company and place it in the public domain, so customers may view it.

Example 2

A student writes: 'Under section 149, every person in India gets a score based on turnover, fixed by the GST Council.' Examine the statement.

Show the solution
  1. Persons covered: section 149 refers to a registered person, not every person.
  2. Nature: the score 'may' be assigned, so it is enabling.
  3. Basis: it is the record of compliance with the Act, not turnover.
  4. Authority: the section says the Government assigns it, and the parameters are prescribed.
  5. Conclusion: the statement is incorrect on persons, basis and authority.

Answer: The statement is wrong. A registered person may be assigned a score by the Government, based on his compliance record under prescribed parameters.

Exam tips

  • Quote the key words: 'may be assigned', 'record of compliance', 'as may be prescribed', 'public domain'.
  • For a how-is-it-calculated question, say parameters are prescribed and give no invented weights.
  • In case questions, link the facts to compliance record and finish with practical advice.
  • Revise this section with GST Practitioners, since section 48 is in the same compliance group.

Practice questions from Overview of Goods and Services Tax

Goods and Services Tax Compliance Rating in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Goods and Services Tax Compliance Rating: frequently asked questions

What is GST compliance rating under section 149?

It is a score that the Government may assign to a registered person based on his record of compliance with the CGST Act. The score may be updated and placed in the public domain.

How is the GST compliance rating calculated?

Section 149(2) says the score may be determined on such parameters as may be prescribed. The section itself gives no formula, so refer to the prescribed parameters.

Is the compliance rating public?

Section 149(3) says the score may be updated at periodic intervals and intimated to the registered person. It may also be placed in the public domain in the prescribed manner.

Is the rating given to every taxpayer?

No. The Act says a registered person may be assigned a score, so it is enabling and applies to registered persons.