GST Council may Consider Biometric-Based Registration Across India to Curtail Fake Registrations; says CBIC Chief 

Currently, Gujarat, Andhra Pradesh, and the Union Territory of Puducherry have initiated a pilot project for Aadhaar authentication of taxpayers
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The Chairman of the Central Board of Indirect Taxes and Customs ( CBIC ), Sanjay Kumar Agarwal, revealed on Friday that the Goods and Services Tax ( GST ) Council is considering a proposal to enforce mandatory biometric-based Aadhaar authentication for suspicious individuals applying for GST registration on a pan-India scale.

Currently, Gujarat, Andhra Pradesh, and the Union Territory of Puducherry have initiated a pilot project for Aadhaar authentication of taxpayers.

According to the CBIC Chaiman, the encouraging results from the pilot projects in Gujarat and Andhra Pradesh have demonstrated a significant reduction in the number of GST registration applications. This decline suggests that measures such as biometric authentication are effective in deterring individuals from using fraudulent identities to create fake Input Tax Credit ( ITC ) firms.

Also read: GST e-Invoice Portal Update: Government Launches Enhanced System with Quick Action e-Invoice Features

“Going by the encouraging results, it seems now more and more states will opt for it, or it can be made uniformly applicable to all the states because ultimately it is the revenue which is impacted by fake registrations,” Mr. Sanjay Agarwal stated in an interview with PTI.

Currently, GST authorities utilise One-Time-Password ( OTP ) based Aadhaar authentication to establish the identity of applicants seeking registration. However, in response to instances where others’ identities were misused to create counterfeit firms for claiming ITC, CBIC has decided to shift towards biometric authentication. Under this new approach, individuals in suspicious cases will be required to visit an Aadhaar center for biometric verification.

The Chairman also  emphasized that the decision to implement Aadhaar-based authentication nationwide rests with the GST Council. Although no such proposal has been presented to the Council as of now, Agarwal anticipates that a proposal might be brought forward in the future.

Mr. Agarwal highlighted the recent efforts of the department in launching a concerted drive against the masterminds of syndicates involved in seeding fake ITCs. Tightening the registration process, Agarwal explained that a risk assessment is now conducted before registration, and applicants may undergo physical verification based on the assessment.

Also read: CBIC Extends Deadline for Feedback on Harmonization of GST Rate Schedule and Service Classification to 16th Feb 2024

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