Ensuring Identity for GST Registration through Aadhaar Verification
The Central Board of Indirect Tax and Customs initially made Aadhaar authentication mandatory for GST registration but later made it optional, with exceptions for non-residents and existing registrants. Recent updates have expanded biometric-based Aadhaar verification nationwide and introduced alternative document verification for those not opting for Aadhaar. This process helps validate taxpayer identities to prevent fraudulent activities within the Goods and Services Tax framework.
The Central Board of Indirect Tax and Customs (CBIC) initially mandated Aadhaar authentication for GST registration starting April 1, 2020. However, this requirement was later updated on August 20, 2020, making it optional. Certain individuals are exempt from this authentication, including non-residents, non-Indian citizens, and those already registered under GST.
Latest Updates
February 12, 2025
The GSTN has issued an advisory detailing new Aadhaar and biometric authentication stipulations for GST Registration. Applicants are categorized into three groups: those not choosing Aadhaar authentication, those opting for Aadhaar authentication with mandatory biometric verification, and cases where an Application Reference Number (ARN) is not generated. Applicants must follow these advisory guidelines. For additional information, please refer here.
July 10, 2024
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The CBIC announced via CGST notification no. 13/2024 that biometric-based Aadhaar authentication for GST registration, previously piloted in Gujarat and Puducherry, has now been implemented across all of India.
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Furthermore, CGST notification no. 12/2024 from the CBIC stated that applicants who do not opt for Aadhaar authentication must submit a photograph of the individual applicant or related individuals. Their original documents will then be verified at designated facilitation centers.
Understanding Aadhaar Authentication
Aadhaar authentication is a procedure where an individual's Aadhaar number and biometric data are submitted to the Central Identities Data Repository (CIDR). The CIDR then verifies the information against its records to confirm the user's identity for a specified action.
The primary goal of Aadhaar authentication is to establish an online system capable of validating Aadhaar holders' identities at any time and location. This measure aims to curb fraudulent practices within the Goods and Services Tax framework.
GST Regulations on Aadhaar Authentication for Registration
Applicants seeking GST registration have the option to undergo Aadhaar authentication. Exemptions apply to individuals specified by the Central government under the CGST Act, as well as those for whom Aadhaar authentication is statutorily required under Section 25(6C) of the CGST Act.
This option for Aadhaar authentication is applicable for applications submitted on or after August 21, 2020. Prior to this, specifically between April 1, 2020, and August 20, 2020, all GST registration applicants were required to undergo mandatory Aadhaar authentication.
Applicants choosing this option must provide their Aadhaar number with the GST registration application. Subsequently, they need to digitally verify it on the GST portal using an authentication link sent to the mobile number and email ID linked to their Aadhaar. This process involves entering an OTP on the portal for e-validation. It is essential for the primary authorized signatory and at least one promoter or partner to complete Aadhaar authentication.
For entities such as companies, LLPs, foreign companies, AOPs, societies, trusts, or clubs, Aadhaar authentication is only necessary for the primary authorized signatory.
Following successful registration, any future return filings or service usage on the GST portal will require an OTP sent to the mobile number and email ID linked to the Aadhaar number. Taxpayers can only proceed after entering this OTP.
If an applicant fails to complete Aadhaar authentication when opted, or chooses not to opt for it, they can still file their application without the Aadhaar authentication steps. In such instances, registration will only be granted after a physical verification of the principal place of business by a GST officer. Alternatively, officers may verify e-KYC documents of the primary authorized signatory and one promoter/partner, provided written permission is obtained from an officer not below the rank of Joint Commissioner.
In these situations, a notice in Form GST REG-3 will be issued within 30 days from the application submission date. The submission date is defined as the earlier of the Aadhaar authentication date or 15 days after submitting Part B of Form GST REG-01.
The applicant must respond within 7 working days of receiving the notice in Form GST REG-4. Upon receiving a reply, the officer has 7 working days to verify and approve the registration grant. If no reply is received within 7 working days or the reply is unsatisfactory, the GST officer may reject the registration grant in REG-05. However, if the officer fails to act within the specified timelines, the registration is considered deemed granted.
Previously, registration would only be granted after a physical verification of the principal place of business within 60 days of the application date. If an Aadhaar number has not been assigned to an individual applying for GST registration, alternative identification methods are available, such as physical verification of the business premises as per CGST Rules.
Mandatory Scenarios for Aadhaar Authentication
According to Section 25(6C) of the CGST Act, Rule 8 mandates Aadhaar authentication for the following categories of individuals to qualify for GST registration:
- All types of authorized signatories
- Managing or authorized partners of a partnership firm
- The Karta of a Hindu Undivided Family (HUF)
Exemptions
The only exceptions are individuals who are not citizens of India or fall outside the categories listed above (i.e., not an individual, authorized signatory, managing/authorized partner, or HUF Karta).
Biometric Aadhaar Authentication
Rule 8(4A) of the CGST Rules was amended by Notification No. 27/2022 on December 27, 2022, introducing biometric-based Aadhaar authentication for GST registrations. This initiative initially began as a pilot program in Gujarat. It combines with risk-based physical verification for individuals identified through data analysis on the GST portal. Effective July 10, 2024, the CBIC, through CGST notification no. 13/2024, extended this biometric-based Aadhaar authentication for GST registration nationwide.
Furthermore, CGST notification no. 12/2024, also issued on July 10, 2024, by the CBIC, stipulates that applicants who choose not to undergo Aadhaar authentication must provide a photograph of the individual applicant or relevant individuals. Their original documents will then be verified at designated facilitation centers.
Deemed Approval of GST Registration Applications
An application is considered automatically approved by the officer if no action is taken within the specified timelines for the following circumstances:
| Case | Timeline |
|---|---|
| A person who has successfully completed Aadhaar authentication or is exempt from the Aadhaar authentication requirement. | 3 working days from the application submission date |
| A person who opted for but failed to complete Aadhaar authentication. | 21 working days from the application submission date to issue the notice in Form REG-3 |
| A person who has not opted for Aadhaar authentication. | 21 working days from the application submission date |
| A person who opted for but failed to complete Aadhaar authentication, received a notice in Form GST REG-3, and has replied in REG-4. | 7 working days from the date of receiving the response, information, or required documents |
Steps for Aadhaar Authentication During GST Registration
To authenticate the Aadhaar number for the primary authorized signatory and one of the promoters/partners during GST registration application, follow these steps:
Step 1: While completing Part-B of the application, navigate to the Aadhaar authentication tab and select 'Yes'. If 'No' is selected, a prompt will appear. Click 'OK' and upload e-KYC documents for the signatory and one promoter/partner. Proceed with verification to finalize the application submission.
Step 2: An authentication link will be sent to the registered mobile number and email ID provided in the application for both the primary authorized signatory and the relevant promoter or partner. This link remains valid for 15 days. Click on the link, enter the Aadhaar number, and input the OTP received on the mobile number and email. A confirmation message will indicate successful authentication. Users can re-request the authentication link on the GST portal by going to 'My Saved Applications' > 'Aadhaar Authentication Status' > 'RESEND VERIFICATION LINK'.
Steps for Aadhaar Authentication for Existing Taxpayers
For existing taxpayers, the process to authenticate Aadhaar involves these steps:
Step 1: Log in to the GST portal and access the "MY PROFILE" page. Select "Aadhaar Authentication Status". Two options will be presented.
Step 2: Choose either to "Send Aadhaar authentication link" or "upload e-KYC documents". If the former is selected, check the email ID and mobile number of the signatory and the specific promoter or partner for the links and complete the OTP verification. If the latter is chosen, the tax officer will review the documents for approval or rejection. In this case, the taxpayer will be considered e-KYC Authenticated, not Aadhaar Authenticated.
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