Provision for Aadhaar Authentication in GST Registration

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Brief Introduction:

The Finance Act (2) 2019 inserted Section 25(6A), Section 25(6B), Section 25(6C) and Section 25(6D) under CGST Act, 2017 w.e.f. 01-01-2020 to provide for authentication of the registration or to furnish proof of possession of Aadhaar number in the manner prescribed in Rules.

For this purpose, Rule 8 (4A) was introduced vide CGST (Third Amendment) Rules, 2020 w.e.f. 23-03-2020 by virtue of which an applicant has to go undergo authentication of Aadhaar number effective from 01.04.2020 for grant of registration. Since, the functionality was not operational, therefore now government has vide Notification No. 62/2020-CT dated 20.08.2020 now amended Rule 8(4A) retrospectively w.e.f. 01.04.2020 to enable the functionality of Aadhaar verification w.e.f. 21.08.2020. Accordingly, the timelines and procedure has also been introduced with respect to this procedure. (Refer Notification No 62/2020-CT dated 20.08.2020).

Key Features of Authentication Procedure:

  1. Aadhaar Authentication process has been introduced, for the persons applying for GST registration as Normal Taxpayer/ Composition/ Casual Taxable Person/ Input Service Distributor (ISD)/ SEZ Developer/ SEZ Unit etc. in Form GST REG 01.
  2. Under this, Individuals, Authorised signatory of all types of businesses, Managing and Authorised partners of a partnership firm and Karta of a Hindu undivided family, applying for new registration, can opt to undergo e-KYC authentication of their Aadhaar number.
  3. Applicants, who, either do not provide Aadhaar, while applying for new registration or whose Aadhaar authentication fails in validation, would be subjected to site verification by the tax department. However, Tax authority based on the documents produced and with the approval of prescribed officer can grant registration instead of physical verification.
  4. Persons who are not resident /citizen of India are exempted from the Aadhaar authentication process

Timelines for grant of registration are:

  1. In case of successful authentication of Aadhaar, registration will be deemed approved within 03 working days
  2. If Aadhaar authentication is not opted for or if authentication fails in validation and no SCN is issued within 21 days by tax official, registration will be deemed approved.
  3. Tax Officer can issue SCN within the period specified for grant of registration, like in cases of successful Aadhaar authentication i.e. 03 working days, or in cases when taxpayer do not opt to provide Aadhaar or when Aadhaar authentication fails i.e. 21 working days.
  4. Applicants can submit their reply within 07 working days from issue of SCN.

Mechanism of Aadhaar Authentication:

  1. Once registration application is submitted, an authentication link will be shared on GST registered mobile numbers and email ids mentioned in the GST application
  2. On clicking the verification link, a window for Aadhaar Authentication will open where they have enter Aadhaar Number and the OTP received by them on the mobile number linked with Aadhaar
  3. Taxpayer need to complete Aadhaar authentication of all Promoters/ Partners/ Authorized Signatories/ Karta etc. as mentioned in the application to avail this option.
  4. Applicant can access the link again for authentication by navigating to My Saved Applications > Aadhaar Authentication Status > RESEND VERIFICATION LINK
  5. Persons already registered on GST portal are not required to undergo Aadhaar authentication at this stage