A report by Rubix Data Sciences Pvt Ltd (Rubix), a technology and analytics-based B2B risk management and monitoring platform, indicated that the surveyed business entities between Q3 and Q4 FY 2022 showed improvement in the GST compliance score and external credit while the PF compliance score and risk variables of entities deteriorated compared to the prior quarter ratings.

At the end of each quarter of the Indian financial year, Rubix compares the data in its monitoring portfolio of how Indian business entities have performed versus the prior quarter, from a statutory compliance and credit rating perspective. The key parameters being monitored each quarter are GST filings, Provident Fund filings, and credit ratings.

According to Rubix, the purpose of the Quarterly Risk Transition Report is to see if the business entities being monitored show any deterioration or improvement from a statutory compliance or external credit rating perspective as compared to the prior quarter. 

There could be several reasons for non-compliance with statutory requirements for paying of GST and Provident Fund and filing the Returns. Of these, the report says cash flow delays or liquidity problems that business entities face are probably the most important drivers for non-compliance. Similarly, changes in credit ratings need to be examined closely in order to understand the reasons behind the change. 

Here are the key insights highlighted in the report: 

  • There was an improvement in the Rubix GST Compliance Score of 37 percent of the business entities between Q3 and Q4 FY 2022, versus 20 percent improvement recorded in the prior quarter – this is the largest improvement in the Rubix GST Compliance Score in six quarters, since Q2 FY 2021.
  • The Rubix GST Compliance score of 738 business entities of the 11,393 companies (only 6 percent) deteriorated between Q3 and Q4 FY 2022. In the prior quarter, 10 percent of the business entities had witnessed a drop in this indicator.
  • The Rubix Provident Fund Compliance Score of 32 percent of the business entities improved in Q4 FY 2022, compared with only 18 percent in the prior quarter. 
  • The external credit rating of 81 companies (4 percent) improved in Q4 FY 2022, compared to only 29 companies (2 percent) in the prior quarter. 
  • The percentage of companies showing no deterioration in any of the three risk variables increased to 78 percent in Q4 FY 2022 compared with 73 percent in the prior quarter.

Source: SMBSTORY news