GST

Authentication of Aadhaar number under the GST Act

The GST authorities had been using the OTP (One-time Password)–based verification for the taxpayers registered under the GST to ensure user authentication and prevent fraudulent transactions. With the rampant use of technologically advanced methods such as biometrics, the GST Council introduced the idea of authentication of Aadhaar for registered taxpayers, which was approved in its 39^th Meeting held in March 2020. In pursuance of the same, the Central Board for Indirect Tax and Customs (CBIC) issued certain notifications pertaining to the authentication of Aadhaar for GST Registration. However, the same were later modified in August 2020 and were thus made optional. Furthermore, in its 45^th Council Meeting dated September 2021, Authentication of Aadhaar was again made compulsory for filing refund requests and for revocation or cancellation of registrations. In this article, we will delve into details of the authentication of Aadhaar Number for GST purposes and try to understand the purposes for which it has been mandated and further see what are the steps involved in undertaking this entire process.  

Authentication of Aadhaar

Let us first understand what we mean by authentication of Aadhaar. Authentication of Aadhaar involves submitting the details of the Aadhaar number to the taxpayer and his biometric details to verify the user. These details are ultimately submitted to the CIDR (Central Identities Data Repository), which then verifies the submitted data on the basis of the information already available with it.

The idea is to be able to access the data online from anywhere in order to verify and authenticate the identity of the users to prevent any fraudulent transactions. Further, it is expected to enhance the ease of doing business.  

Compulsory Cases of Authentication of Aadhaar

As per Section 25(6C) of the Central Goods and Services Act (CGST), the authentication of Aadhaar in GST Registration has been mandated for the Authorised Signatory of the following organizations:

• A partnership Firm
• A proprietorship Firm
• A Company incorporated under the Companies Act, 2013
• A Hindu Undivided Family (HUF)
• A trust
• An Association of Persons (AOP) or Body of Individuals (BOI) or Societies

Eligible Persons for Authentication of Aadhaar

Barring a few individuals, the following persons’ Aadhar numbers are to be authenticated:

Exemption from Aadhaar Authentication

The authentication of Aadhaar is not mandatory for everyone, and the following persons have been exempted from the requirement of authentication of Aadhaar:

• A non-citizen
• A Public Sector Undertaking (PSU)
• A Local Authority
• A body constituted under a stature or a Statutory body
• An establishment of the Central Government or State Government
• Any person making an application for registration under Section 25(9) of the Act

Steps involved for Authentication of Aadhaar in GST

In order to authentication of Aadhaar, the authorized signatories, promoters, partners, or the concerned individuals can undertake the following steps:

• Log in on the GST Portal¹ by providing your credentials.
• Navigate to “Services” and select “New Registration”.
• While following the process of Registration, the applicant can choose to opt for Authentication of Aadhaar by selecting the “Aadhaar Authentication” Tab.
• The applicant can select “Yes” or “No” depending on whether they want to authenticate their Aadhaar or not.
• If the applicant opts for authentication of Aadhaar and selects “Yes”, an Aadhaar authentication link will be sent to his registered email address. The applicant must open that link to enter his Aadhaar Number and click on “Validate”, after which an OTP will be received, which must be entered by the applicant.
  • It must be noted that this link will be valid only for 15 days, after which the link will expire and cannot be used further for Aadhaar authentication.
• Suppose the applicant does not want to opt for authentication of Aadhaar and selects “No”. In that case, the applicant will be personally required to visit the Tax Authority of his jurisdiction, where the concerned officials will physically verify the applicant’s documents before granting their approval.

Steps for an Already Existing Taxpayer

In case the applicant is already an existing taxpayer, he/she can undertake authentication of Aadhaar details by simply taking the following steps:

• Log in on the GST Portal by entering your credentials.
• The existing user may either choose to send Aadhar authentication or upload E-KYC Documents.
• If the user opts for “Send Aadhaar Authentication”, an activation link and an OTP are sent to his registered email address for verification.
• In case the user opts for “Upload E-KYC Documents”, then the user will be regarded as E-KYC Authenticated and not Aadhaar authenticated. The concerned tax official may either accept or reject the documents.

When no Aadhaar Number has been issued

In case the concerned authorities have issued no Aadhaar number to the concerned person, such person is unable to apply for Aadhaar verification. Such an applicant may opt for E-KYC Verification by submitting the following documents:

• Aadhaar Enrolment Number/ID Slip
• Voter ID Card issued by the Election Commission of India
• Driving License issued by the Licensing Authority
• Passport Number
• KYC Form
• Bank Passbook with photograph
• Any other certificate issued by a Competent Authority.

It must be noted that these documents should be uploaded in PDF or JPEG form and subject to a maximum size of 2 MB.

Mandatory Authentication of Aadhaar

As discussed earlier, the Central Board of Indirect Tax and Customs (CBIC) notified about the authentication of Aadhaar for GST Registration in March 2020. In August 2020, the CBIC issued some notifications yet again, making the authentication process optional.

From April 2020 to August 2020

Therefore, between April 2020 and August 2020, the government mandated authentication of Aadhaar, barring the few individuals exempted from this process. This meant that once this process was complete, to file his return in the future, the applicant would be required to enter an OTP linked to his Aadhaar number, and only then he can proceed.

After August 2020

Post-August 2020, the applicant was given an option and could opt for authentication of Aadhar while applying for GST registration. Those who opted for such authentication were mandatorily required to submit their Aadhaar number for registration under GST, which they needed to authenticate through an E-verification process.

Post January 2022

In its 45^th Meeting, the GST Council yet again made the authentication of Aadhaar mandatory for certain purposes such as:

• Filing claims for IGST Refunds under Rule 96 of CGST Rules
• Applications of Revocation or Cancellation of Registration in Form GST REF-21 under Rule 23.
• Filing claims for Refunds under Rule 89 of the CGST Rules.

In pursuance of the same, the CBIC modified the CGST Rules of 2017 vide notification no. 35/2021 dated 24^th September 2021, as per which, with effect from 1^st January 2022, the authentication of Aadhaar will be mandated again for the abovementioned purposes.

Conclusion

Authentication of Aadhar is a step undertaken by the authorities to verify the identities of the taxpayers and thereby keep a check on fraudulent transactions and tax malpractices such as dummy registrations. It helps the authorities validate an applicant’s credentials from anywhere in case of confusion or doubt. This latest requirement is further said to enhance the ease of doing business, and taxpayers can easily undertake the process online. These procedures are not as complicated as they may seem, but if you are confused about how to proceed and even if you are clear on that part, you still feel overwhelmed with all the compliances and regulations, you may choose to seek professional help and expert advice.

If you are a company owner or a business that is unsure about GST, feel free to approach the GST professionals at Enterslice for a seamless experience.

FAQs:

1. https://www.gst.gov.in/