GST authorities are taking strict action against Fake GST Registrations. The latest step is to authenticate the real identity of GST applicants. The Delhi High Court has directed the GST authorities to continue Biometric Aadhaar Authentication for GST Registration across India till further orders. The step aims to stop fraudsters from getting GST registrations based on stolen or misused identities.
The Growing Problem of Fake GST Registrations
By using a person’s PAN and Aadhaar details, fraudsters may establish firms without his consent, and use such firms for issuing fake bills or claiming Input Tax Credit.
The following are indicative of the gravity of the situation:
| Financial Year | Fraudulent Registrations | Suspected Tax Evasion |
|---|---|---|
| 2023–24 | 2,800 | Over ₹15,000 crore |
| 2024–25 | 1,654 | Over ₹13,000 crore |
Authorities found 4,454 fraudulent sign-ups across two financial years. The tax evasion allegedly involved was ₹28,000 crore.
What Is Biometric Aadhaar Authentication?
GST registration involves verification of identity by means of documents and otherwise. OTP verification can verify access to a registered phone number. However, OTP does not always authenticate the real Aadhaar holder.
Biometric Aadhaar Authentication for GST Registration provides added identity verification. Biometric authentication is used to help establish the identity of the applicant. This makes identity-based Fake GST Registrations much more difficult.
How Can It Strengthen GST Registration?
The measure can assist authorities:
- Know the real person behind an application
- Stop misuse of Aadhaar and PAN information
- Find suspicious applications
- Prevent fraudulent entities from entering GST system
- Curb Fake GST Registrations based on identity
Further, the Delhi High Court matter has also brought out the need for more verification measures. This includes facial recognition, video verification, alerts and physical verification in real time.
What Does This Mean for Taxpayers?
Biometric verification is yet another step of identity verification during GST registration for genuine applicants. But it provides greater protection against ID theft. The Biometric Aadhaar Authentication for GST Registration gives a stronger method of verifying the applicants for the tax authorities before registration is allowed.
The goal is simple: to ensure that the GST registration applicant is actually connected to the identity and documents submitted.
Conclusion
Biometric Aadhaar Authentication for GST Registration can be a big weapon in the war against Fake GST Registrations. Strong identity verification and supporting checks will make it difficult for fraudsters to obtain fraudulent GST registration. The measure can also work toward protecting genuine taxpayers whose PAN or Aadhaar details can otherwise be misused.
FAQs
Q1. What is meant by biometric Aadhaar Authentication in GST Registration?
This means the Aadhaar biometric authentication process that would help determine the identity of the applicant seeking registration under GST.
Q2. Why is there a need for biometric authentication in registration of GST?
It helps in better identification of persons and reduces the misuse of both Aadhaar and PAN numbers.
Q3. Would the biometric verification process solve the problem of fake GST registrations?
No. Even though it will help to reduce the problem of fake GST registration, other methods of verification and monitoring will remain relevant.
Sources:
- https://taxguru.in/goods-and-service-tax/delhi-hc-directs-biometric-aadhaar-authentication-gst-registration.html
- https://www.moneycontrol.com/news/business/delhi-hc-orders-biometric-aadhaar-authentication-for-every-gst-registration-suggestion-in-light-of-misuse-of-the-stolen-aadhar-pan-14026998.html
- https://www.outlookmoney.com/tax/fake-gst-registrations-put-rs-28194-crore-tax-evasion-in-focus-delhi-hc-orders-aadhaar-biometric-check
- https://cfo.economictimes.indiatimes.com/news/tax-legal-accounting/delhi-hc-bars-gst-registration-without-biometric-based-aadhaar-authentication/134008113
Moreover, if you want any other guidance relating to Fake GST Registrations, Biometric Aadhaar Authentication for GST Registration, please feel free to talk to our business advisors at 8881-069-069.
Download the E-Startup Mobile App and never miss the latest updates relevant to your business.