The Kerala GST Department has introduced a biometric-based Aadhaar authentication system for GST registration to enhance verification measures and curb fraud. This initiative is aimed at improving the reliability of the registration process by verifying the identity of individuals through Aadhaar-linked biometrics, which should prevent misuse of GST registrations for tax evasion and ensure that only genuine businesses are granted registration.
These measures help to prevent tax fraud through the misuse of government-issued identification documents such as Aadhaar and PAN cards without the knowledge of their owners for tax fraud. Such incidents have come to light across the country.
In Kerala, the GST Intelligence wing had detected incidents where these documents were used for creating fake GST registrations. The department also noted that Puducherry, Andhra Pradesh, and Gujarat had reported a significant dip in such fraudulent activities following the introduction of biometrics-based Aadhaar authentication.
Complete Draft Replies of GST ITC Related Notices, Click Here
Candidates are selected for Aadhaar authentication from among the taxpayers who have filed applications on the common portal on the basis of data analysis and risk parameters. In the ‘high-risk’ cases, the biometric Aadhaar authentication is carried out. For the rest, an OTP-based Aadhaar authentication has been recommended.
The system requires applicants to complete a biometric verification using their Aadhaar at designated centers. This step ensures that only genuine applicants are registered under GST by validating their identity through a secure, tamper-proof process. The GST council recommended introducing biometric-based Aadhaar authentication for GST registrations in a phased manner in June this year.
The authentication has to be completed within 15 days of submitting the GST REG-01 application on the common portal for the registration.
This new authentication measure targets the reduction of fake or non-compliant GST registrations, which are often used for fraudulent input tax credit ( ITC ) claims or other forms of tax evasion.
Complete Draft Replies of GST ITC Related Notices, Click Here
This system is a proactive step by the Kerala GST Department to prevent fraud and streamline the GST registration process. It helps strengthen GST compliance and reduce the risk of tax evasion through fake or shell businesses. By leveraging Aadhaar’s robust biometric verification, the Kerala GST Department aims to create a more transparent and efficient tax environment that supports genuine businesses and ensures fair tax practices.
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