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August 21, 2020

Aadhaar Mandatory for GST Registration else Physical Verification by Officer from 21 August 2020

Aadhaar Mandatory for GST Registration else Physical Verification by Officer from 21 August 2020

Aadhaar is a 12-digit unique random number that is issued by the UIDAI- Unique Identification Authority of India to the Indian residents after a set of the identification process arranged by the Authority.

Aadhaar Authentication is a process by which the Aadhaar number together with the demographic and biometric statistics of an Aadhaar cardholder is deposited into the Central Identities

Data Repository or CIDR for its authentication and such storehouse validates the accuracy of the data or whether the same is insufficient basis the available data on it.

Aadhaar Authentication aims to provide an online platform of identity to validate the identity of the Aadhaar card holder promptly anytime and at anyplace.

The CBIC has issued Notification no 62/2020 dated 20.08.2020 wherein some modifications in existing rules were notified making Aadhaar authentication applicable w.e.f 21st August, 2020 for GST Registration

Sub Rule 4A inserted under Rule 8:-

Rule 8 of the CGST Rules pertains to Application for registration under CGST.

According to Rule 8(4), the applicant shall electronically submit an application in Part B of FORM GST REG-01, duly signed or verified through electronic verification code, along with the documents specified in the said Form at the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

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As per the newly introduced Sub Rule 4A, where an applicant, other than a person notified under section 25(6D), opts for authentication of Aadhaar number, he shall, while submitting the application under sub-rule (4), with effect from 21st August, 2020, undergo authentication of Aadhaar number.

The date of submission of the application in such cases shall be the date of authentication of the Aadhaar number or 15 days from the submission of the application in Part B of FORM GST REG-01 under sub rule (4), whichever is earlier.

Proviso to Rule 9(1) is introduced:- 

Rule 9 pertains to verification of the application and its approval. According to Rule 9(1), the application shall be forwarded to the proper officer who shall examine the application and the accompanying documents and if the same are found to be in order, approve the grant of registration to the applicant within 3 working days from the date of submission of the application.

The below mentioned proviso has been added to Rule 9(1)

  • Where a person, other than a person notified under section 25(6D), fails to undergo authentication of Aadhaar number as specified in sub-rule (4A) of rule 8 or does not opt for authentication of Aadhaar number, the registration shall be granted only after physical verification of the place of business in the presence of the said person, in the manner provided under rule 25
  • The proper officer may, for reasons to be recorded in writing and with the approval of an officer not below the rank of Joint Commissioner, in lieu of the physical verification of the place of business, carry out the verification of such documents as he may deem fit.

Thus physical verification can be avoided by officer if he has approval of Joint Commissioner

Proviso to Rule 9(2) is introduced:- 

According to Rule 9(2):-

  • Where the application submitted under rule 8 is found to be deficient, either in terms of any information or any document required to be furnished under the said rule, or where the proper officer requires any clarification with regard to any information provided in the application or documents furnished therewith, he may issue a notice to the applicant electronically in FORM GST REG-03 within 3 working days from the date of submission of the application.
  • The applicant shall furnish such clarification, information or documents electronically, in FORM GST REG-04, within 7 working days from the date of the receipt of such notice.

The below mentioned proviso has been added to Rule 9(2)

Where a person, other than a person notified under section 25(6D), fails to undergo authentication of Aadhaar number as specified in sub-rule (4A) of rule 8 or does not opt for authentication of Aadhaar number, the notice in FORM GST REG-03 may be issued within 21 days from the date of submission of the application.

Rule 9(5) is introduced:- 

According to the newly substituted Rule 9(5), if the proper officer fails to take any action,

  • within 3 working days from the date of submission of the application in cases where a person successfully undergoes authentication of Aadhaar number or is notified under section 25(6D); or
  • within the time period prescribed under the proviso to sub-rule (2), in cases where a person, other than a person notified under section 25(6D), fails to undergo authentication of Aadhaar number as specified in sub-rule (4A) of rule 8; or
  • within a 21 days from the date of submission of the application in cases where a person does not opt for authentication of Aadhaar number; or
  • within a 7 working days from the date of the receipt of the clarification, information or documents furnished by the applicant under sub-rule (2), the application for grant of registration shall be deemed to have been approved.

Basically, now a new tab will be activated in GST Registration Form REG-01 i.e. Aadhaar Authentication whereby the applicant will be given an option to choose whether they have opted for Aadhaar Authentication or not.

If the applicant has opted for Aadhaar authentication, a link will be sent to the registered email ID after Successful submission of Aadhaar Authentication. If the applicant has not opted for Aadhaar authentication, an Officer will visit the business site and after approval by the Officer, GST Registration will be granted.

The role of Aadhaar has undergone a massive change since its implementation in 2010 to provide every Indian resident with a unique identification number, which can be used to avail benefits offered by the government.

Over a period of time, it has evolved from being a voluntary to mandatory information required for direct cash transfers. The government has also made it mandatory to link Aadhaar with Permanent Account Number (PAN) to check tax evasion and monitor tax filings. So remember, it will now be extremely essential to authenticate your Aadhaar if your want to opt for GST registration or else be prepared for a visit by the GST Officers.

Provision for Aadhar Authentication in GST Registration

Under this, Individuals, Authorised signatory of all types of businesses, Managing and Authorised partners of a partnership firm and Karta of an Hindu undivided family, applying for new registration, can opt to undergo e-KYC authentication of their Aadhaar number.

Applicants, who, either do not provide Aadhaar, while applying for new registration or whose Aadhar authentication fails in validation, would be subjected to site verification by the tax department. However, Tax authority based on the documents produced can grant registration.

Timelines for grant of registration are:

In case of successful authentication of Aadhaar, registration will be deemed approved within 03 working days

If Aadhar 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

Tax Officer can issue SCN within the period specified for grant of registration, like in cases of successful Aadhar authentication i.e. 03 working days, or in cases when taxpayer do not opt to provide Aadhaar or when Aadhar authentication fails i.e. 21 working days. Applicants can submit their reply within 07 working days from issue of SCN

Important points while opting for Adhaar authentication is as follows:

Once registration application is submitted, an authentication link will be shared on GST registered mobile numbers and email ids mentioned in the GST application

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

Taxpayer need to complete Aadhaar authentication of all Promoters/ Partners/ Authorized Signatories/ Karta etc. as mentioned in the application to avail this option

Applicant can access the link again for authentication by navigating to My Saved Applications > Aadhaar Authentication Status > RESEND VERIFICATION LINK

Persons already registered on GST portal are not required to undergo Aadhar authentication at this stage

Persons who are not resident /citizen of India are exempted from the Aadhaar authentication process

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