India has implemented new authentication requirements for Goods and Services Tax (GST) registration, mandating Aadhaar verification or biometric authentication to enhance security and prevent fraudulent registrations. The change follows India’s broader push to expand Aadhaar authentication across government and private sector services.
Under the updated system, applicants must complete Aadhaar authentication or undergo biometric authentication and document verification at a designated GST Suvidha Kendra. The process requires submission of an Aadhaar number with the GST registration application, followed by authentication through an OTP sent to the registered mobile number and email ID linked to Aadhaar. The multi-factor authentication approach complements the Reserve Bank of India’s recent security initiatives for strengthening digital verification systems.
For entities such as companies, LLPs, foreign companies, and other organizations, authentication is required for the primary authorized signatory. In the case of other business structures, both the primary authorized signatory and at least one promoter or partner must complete the authentication process. The requirement extends the biometric verification standards already implemented in other sectors, such as SIM card registration.
The biometric-based Aadhaar authentication system will be implemented nationwide from July 10, 2024, as specified in CGST Notification No. 13/2024. The system uses fingerprints and iris scans to verify the identity of GST registration applicants, leveraging the same robust biometric infrastructure managed by the Unique Identification Authority of India (UIDAI) that serves over 1.3 billion citizens.
Applicants who do not opt for or complete Aadhaar authentication may still submit GST registration applications. However, their registration approval will require physical verification of the principal place of business by a GST officer or documentary verification.
The authentication timeline varies based on the chosen verification method. For Aadhaar authentication, the process typically completes within 3 working days if no notice is issued. Applications requiring physical verification may take up to 21 working days for approval.
Certain groups are exempt from mandatory Aadhaar authentication, including non-citizens and individuals outside specified categories. The Central Government may also grant exemptions under the CGST Act. The flexibility acknowledges the diverse nature of businesses operating in India while maintaining security standards.
The new system aims to streamline registration processes while maintaining security. It enables faster verification of applicants and reduces the need for manual document verification, potentially leading to quicker approval times for legitimate businesses. The initiative is part of India’s larger digital transformation agenda, which includes recent developments such as digital driving licenses and enhanced government service delivery systems.
Sources: India Filings, CA India Delhi, SAG Infotech, CA Club India, CA Club India
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