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February 17, 2025

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Aadhaar Authentication and e-KYC in GST Registration

Authentication through Aadhaar and Know Your Customer processes assisted through technology or e-KYC have become part of the framework for registration for Goods and Services Tax (GST) in India. These processes are designed to ease the registration workflow, authenticate the applicants, and prevent any cases of impersonation.

Understanding Aadhaar Authentication and e-KYC

A person's identity over Aadhaar Authentication is checked and validated by matching his/her biometric information or demographic data with the Aadhaar number. This is further validated against the Central Identities Data Repository (CIDR). This procedure builds user identity assurance and protection at the system level.

E-KYC is an automated method that permits businesses and corporations to identify their client's customers without a physical engagement. Users obtaining GST e-registration can submit required documents and information via the Internet, which simplifies and accelerates the verification process by eliminating the need for any hard copy documents.

The Role of Aadhaar Authentication in GST Registration

Having Aadhaar authentication as part of the GST registration process serves many functions.

Faster Registration: Aadhaar-authenticated applicants can, upon verification, receive their GST registration in three working days.

Improved Verification: When Aadhaar is used for GST registration, it guarantees that the identity of the registrant has been verified, thus reducing the possibility of registration fraud.

Ease of Compliance: Because of the Aadhaar system, new businesses can avoid the hassle of physically checking their business sites as it is no longer needed for GST registration.

Mandatory Aadhaar Authentication: Who Needs It?

The Central Goods and Services Tax Act lays down the following persons are supposed to undergo Aadhaar verification for registration under GST:

Proprietors: Aadhaar verification is required for sole proprietorship businesses.

Partners: In partnership firms, any one of the managing or authorized partners is required to complete the authentication process.

Karta: For the Hindu Undivided Family (HUF), it is expected that Karta to validate the Aadhaar authentication.

Authorised signers: For Aadhaar verification, all designated signers across different business entities are mandatory.

It is noted here that some entities are not required to bear this burden. Such entities include, but are not limited to:

1. Government departments or establishments.

2. Public sector undertakings.

3. Local authorities.

4. Statutory bodies.

5. Non-Indian citizens.

Step-by-Step Guide to Aadhaar Authentication for GST Registration

The Aadhaar authentication process for GST registration is meant to be straightforward. Here is the complete procedure.

Log into the GST portal: Go to the GST website and click on ‘Services’ > ‘Registration’ > ‘New Registration’ to register.

Part A: Legally, the name, PAN, mobile number, and email address are provided. Upon submission, a Temporary Reference Number (TRN) is sent to your registered mobile and email.

Part B: Use the TRN provided earlier to gain access to Part B of the registration form. This entails Business Information apart from Promoters/Partners, Authorized Signatory, Principal Place of Business, and other additional offices, if any.

Aadhaar authentication: Here, click ‘YES’ on the authentication option, which means you are willing to link your Aadhaar with your GST registration.

Verification Link: Once submitted, the primary authorised signatory and one promoter/partner will receive an authentication link on their registered mobile number and email ID.

Authenticate Aadhaar: Click the link provided earlier, enter your Aadhaar number, and the OTP sent to your Aadhaar registered mobile number and email.

Confirmation: After authentication is complete, a successful message will be displayed.

e-KYC Process for GST Registration

Wherever Aadhaar cannot be used, the process of e-KYC can be done by submitting other documents. The key steps are:

Go to GST Portal: Go to and log into the GST portal and click ‘My Profile.’

Aadhaar Authentication Status: Check the ‘Quick Links’ section and search for ‘Aadhaar Authentication Status’ which you should click on.

Upload e-KYC Documents: Select ‘UPLOAD E-KYC DOCUMENTS’ and upload the documents of the principal authorised signatory and one promoter/partner.

Document types accepted for e-KYC are:

1. Aadhaar Enrolment Number

2. Passport

3. Voter ID Card (EPIC)

4. KYC Form

5. Certificate issued by a competent authority

6. Other valid identification documents

The system generates an Application Reference Number (ARN) after all documents have been uploaded. The tax authorities will either approve or disapprove the application after checking the submitted documents.

Implications of Not Opting for Aadhaar Authentication

The GST Registration Process has some issues with efficiency. The Aadhaar verification process is a great example of this. If a user fails to authenticate their Aadhaar account or simply opt-outs of it, they are required to go through muddled steps to register for GST:

Physical Verification: A GST officer visits the user's mothership of business to make sure they are who they state they are.

Extended Processing Time: Instead of the regular Aadhaar verification timeframe, they may take as long as 30 days. Getting g verified through them is a cumbersome headache.

The disconnect between verification and registration must be resolved. The system cut-off point will help diagnose this issue more effectively.

Mandatory Aadhaar Authentication for Refunds and Revocation Applications

Since January 1, 2022, registered persons need to Aadhaar authenticate themselves to:

Make a Claim: Under Rule 89 of the CGST Rules, Aadhaar authentication has become a requirement for filing refund applications.

Request for Cancellation of the Revocation: Rule 23 - Need Aadhaar to apply for revocation of cancellation of GST registration.

The purpose of this mandate is to ensure that these critical functionalities within the GST framework are only available to verified and reliable entities.

Biometric-Based Aadhaar Authentication

To make the verification process more secure, the government has added a biometric-based Aadhaar authentication for GST registration applicants, which is detected through data analysis and risk metrics. This entails:

Biometric Verification: Capturing the biometric data of applicants to make sure they are genuine.

Photograph Capture: Recording of applicants' pictures for files.

After starting it in some states, this process has been rolled out across the country to improve the strength of the GST registration system in particular.

Conclusion

The entire procedure of obtaining GST registration has been simplified greatly by Aadhaar authentication and e-KYC. This process is much faster as there is less fraudulent registration. With Aadhaar, the government has been able to relax its rigorous checks while still ensuring the security of sensitive information. Applicants are free to decline Aadhaar verification, but this option subjects them to more cumbersome checks. Currently, claiming refunds and filing revocation applications also require Aadhaar authentication, which makes it a key feature in the GST system. Businesses should take advantage of the replacement of Aadhaar verification in the registration procedure to receive rapid supply with no hassle to their operations.

FAQs

1. What is Aadhaar authentication in GST registration?

Verifying Aadhaar within the GST framework includes an identity verification step, which is done through either a Time Password (OTP), a biometric scan, or both. How Aadhaar has been issued is then verified.

2. Is Aadhaar authentication mandatory for GST registration?

Indeed, Aadhaar authentication is compulsory for individuals such as self, authorised signatories, partners, and Karta of a HUF. However, government departments, PSUs, and local bodies are exempt from this requirement.

3. What happens if Aadhaar authentication fails during GST registration?

When Aadhaar authentication fails, the application goes through physical verification, which may take up to 30 days to get approval.

4. Can I complete GST registration without Aadhaar authentication?

Yes, still, the applicant will be required to go through alternative processes, which include document-based e-KYC and in-person checks conducted by the GST officer.

5. Is Aadhaar authentication required for GST refund claims?

You are correct that starting January 1st, 2022, Aadhaar authentication is a requirement for applying to get GST refunds and for revocation of registration cancellations.

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