HomeLegal AdviceCBIC to Introduce Biometric Aadhaar Authentication System for High-Risk GST Registration Applicants

CBIC to Introduce Biometric Aadhaar Authentication System for High-Risk GST Registration Applicants

In a groundbreaking move aimed at enhancing the integrity of the Goods and Services Tax (GST) registration process, the Central Board of Indirect Taxes and Customs (CBIC) is set to introduce a cutting-edge biometric-based Aadhaar authentication system for applicants deemed to be high-risk. This innovative system will rely on sophisticated data analytics and risk parameters to ensure the highest standards of security and authenticity.

In an official internal communication distributed to zonal offices across the country, the CBIC announced that the Goods and Services Tax Network (GSTN) is fully prepared to deploy the new authentication system. The inaugural launch of this revolutionary initiative is scheduled to take place in the Union Territory of Puducherry on 30 August 2023. Following this pilot phase, the system will gradually be rolled out in a phased manner to other states and Union territories.

The GSTN had previously issued an advisory outlining the upcoming changes and providing guidance for the new authentication process. This move represents a significant step forward in ensuring the integrity of the GST registration system and preventing fraudulent applications.

Under the new system, applicants flagged as high-risk will be required to visit a GST Suvidha Kendra, with the necessary documentation for verification purposes. Additionally, these high-risk applicants will receive notifications regarding the authentication process on their registered contact numbers, ensuring transparency and clarity throughout the procedure.

This pioneering initiative underscores the commitment of the CBIC to safeguarding the integrity of the GST registration process and ensuring that only eligible and legitimate businesses are granted access to the benefits of the GST regime. The use of biometric-based Aadhaar authentication, in conjunction with advanced data analytics, represents a significant leap forward in the fight against fraudulent applications and tax evasion, ultimately contributing to a more robust and fair GST ecosystem.

When asked about this to the GST experts at Vakilsearch, they further added ‘Central Board of Indirect Taxes and Customs (CBIC)’s decision to introduce a biometric-based Aadhaar authentication system for high-risk GST registration applicants is a laudable step toward bolstering the integrity of the GST regime. This innovative move, supported by advanced data analytics, addresses the longstanding challenge of fraudulent applications and shell companies attempting to exploit the system. 

The phased rollout starting in Puducherry ensures a smooth transition and minimises disruptions, while the requirement for high-risk applicants to visit GST Suvidha Kendras with proper documentation enhances verification, ensuring only legitimate businesses gain GST registration. The notification process on registered contact numbers adds transparency and trust, making this a significant advancement in fortifying the GST ecosystem’.

This proactive approach by CBIC aligns with the broader GST objectives of transparency, curbing tax evasion, and safeguarding legitimate businesses’ interests. The biometric-based Aadhaar authentication system is poised to significantly reduce fraudulent GST registrations, benefiting both the government and genuine businesses across India.

Team Vakilsearch