Aadhaar Authentication/ Physical Verification (New GST Registration) Mandated: Amended CGST Rules 8(4A) & (4B)

The Central Board of Indirect Taxes and Customs (CBIC) has introduced significant changes to Rules 8(4A) and 8(4B) of the Central Good and Services Tax Rules, 2017, whereby Aadhaar Authentication/ Physical Verification in the case of new GST Registration has been mandated, effective from December 26, 2022. These amendments aim to enhance the efficiency and security of the GST registration process  and are based on recommendations of the GST Council.

Aadhaar Authentication/ Physical Verification (New GST Registration) Mandated: Amended CGST Rules 8(4A) & (4B)

The revised CGST Rules have major implications for the GST registration process due to new requirement of compulsory biometric-based Aadhaar authentication, including risk-based physical verification in the state of Gujarat.

CBIC Central Tax Notification 4/2023 dated 31/03/2023: Amendments in CGST Rule 8(4A) relating to Aadhaar Authentication for New GST Registration and Risk-Based Physical Verification of Aadhaar in Gujarat

CBIC Central Tax Notification 5/2023 dated 31/03/2023: Amendments in CGST Rule 8(4B) to align with CGST Rule 8(4A)

Compulsory Biometric-Based Aadhaar Authentication

One of the primary amendments made by the CBIC vide Notification 4/2023 is the mandatory implementation of biometric-based Aadhaar authentication for GST registration. According to the revised/substituted CGST Rule 8(4A), the process and time limits for registration application submission are clearly outlined. The date of submission is now determined as the earlier of Aadhaar authentication or 15 days from the submission of the application in Part B of Form GST REG-01.

Legal Backing for Aadhaar Authentication and Risk-Based Physical Verification in Gujarat

The proviso to revised Rule 8(4A) provides legal backing to both biometric-based Aadhaar authentication and risk-based physical verification of applicants for registration. This new procedure is currently being tested in a trial pilot project in Gujarat. During this process, applicants must verify the original copy of documents uploaded with the application in Form GST REG-01 at designated facilitation centers. The application is considered complete only after the successful conclusion of this verification process. This new rule streamlines the registration process and reduces the likelihood of fraudulent registrations.

Aligning Rule 8(4B) with Updated Rule 8(4A)

Further amendments have been made to Rule 8(4B) of the CGST Rules, vide Notification 5/2023 to ensure consistency with the updated Rule 8(4A). A similar amendment has also been implemented in Notification 27/2022.

Future Expansion of Aadhaar Authentication and Risk-Based Verification

Upon the successful completion of the pilot trial project in Gujarat, the government has plans to implement biometric-based Aadhaar authentication and risk-based physical verification for GST registration in other states as well. This move will not only increase the security and accuracy of the registration process but also help in streamlining the overall GST system across the country.

Conclusion

The recent amendments to the Central Good and Services Tax Rules, 2017, have introduced significant changes to the GST registration process, specially in Gujarat. These changes, which include compulsory biometric-based Aadhaar authentication and risk-based physical verification, are expected to enhance the overall efficiency and accuracy of the GST system. The pilot trial in Gujarat serves as an essential step in introducing these measures nationwide, ensuring a more secure and transparent registration process for businesses.

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