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October 26, 2020

Aadhaar Mandatory for GST Registration else Physical Verification by Office – Delhi Govt

by CA Shivam Jaiswal in GST

Aadhaar Mandatory for GST Registration else Physical Verification by Office – Delhi Govt

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.

Registration of an entity is the initial basic step one has to follow to carry on supply or any other GST compliances. While one may find the registration process unnecessary and complicated, it is followed by a number of advantages, such as legal recognition as supplier of goods/services, availment of ITC, legal authorisation to collect tax from customers etc.

In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Delhi Government amended the Central Goods and Services Tax Rules, 2017 by introducing the Central Goods and Services Tax (Third Amendment) Rules, 2020.

Addition to Rule 8 of the CGST Rules, 2017

Rule 8 pertains to application of registration under GST. Sub-rule (4A), has now been inserted in Rule 8. According to Rule 8(4A), the applicant shall, while submitting an application for registration, with effect from 01.04.2020, undergo authentication of Aadhaar number for grant of registration.

Addition to Rule 9 of the CGST Rules, 2017

Rule 9 pertains to verification of the registration 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. Proviso to Rule 9(1) has now been inserted with effect from 01.04.2020.

According to proviso to Rule 9(1), if a person, other than those notified under section 25(6D), fails to undergo authentication of Aadhaar number as specified in sub-rule (4A) of rule 8(4A), then the registration shall be granted only after physical verification of the principle place of business in the presence of the said person.

Such verification shall be not later than 60 days from the date of application, in the manner provided under rule 25 and the provisions of sub-rule (5) shall not be applicable in such cases.

The objective of the government to insert this proviso is to reduce the fraudulent availment of ITC and reduce the frauds related to GST.

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Substitution of Rule 25 of the CGST Rules, 2017

Rule 25 pertains to physical verification of a business premises in certain cases. According to the Substituted Rule 25, where the proper officer is satisfied that the physical verification of the place of business of a person is required due to failure of Aadhaar authentication before the grant of registration, or due to any other reason after the grant of registration, he may get such verification of the place of business, in the presence of the said person, done and the verification report along with the other documents, including photographs, shall be uploaded in FORM GST REG-30 on the common portal within 15 working days following the date of such verification.

Addition to Rule 80 of the CGST Rules, 2017

Rule 80 pertains to furnishing of Annual Returns. Proviso to Rule 80(3) has now been inserted. According to the said proviso, every registered person whose aggregate turnover during the financial year 2018-2019 exceeds Rs 5 crore shall get his accounts audited as specified under section 35(5) and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C for the financial year 2018- 2019, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.

Addition to Rule 86 of the CGST Rules, 2017

Rule 86 pertains to maintenance of electronic credit ledger. Sub-rule (4A), has now been inserted in Rule 86. According to Rule 86(4A), where a registered person has claimed refund of any amount paid as tax wrongly paid or paid in excess for which debit has been made from the electronic credit ledger, the said amount, if found admissible, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03.

Addition to Rule 92 of the CGST Rules, 2017

Rule 92 pertains to the order sanctioning refund. Sub-rule (1A), has now been inserted in Rule 92.

According to Rule 92(1A), where, upon examination of the application of refund of any amount paid as tax other than the refund of tax paid on zero-rated supplies or deemed export, the proper officer is satisfied that a refund under section 54(5) is due and payable to the applicant, he shall make an order in FORM RFD-06 sanctioning the amount of refund to be paid, in cash, proportionate to the amount debited in cash against the total amount paid for discharging tax liability for the relevant period, mentioning therein the amount adjusted against any outstanding demand under the Act or under any existing law and the balance amount refundable and for the remaining amount which has been debited from the electronic credit ledger for making payment of such tax, the proper officer shall issue FORM GST PMT-03 re-crediting the said amount as Input Tax Credit in electronic credit ledger.

In the Delhi Goods and Services Tax Rules, 2017, rule 96B is inserted which is in respect of the recovery of refund of unutilized input tax credit of integrated tax paid on export of goods where export proceeds are not realized. In the rules, in FORM GST RFD-01, after the declaration under rule 89(2)(g), the undertaking is also inserted by the notification wherein it is written that an applicant undertakes to deposit to the Government the amount of refund sanctioned along with interest in case of non-receipt of foreign exchange remittances as per the proviso to section 16 of the IGST Act, 2017 read with rule 96B of the CGST Rules 2017.

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 you want to opt for GST registration or else be prepared for a visit by the GST Officers. The amendment shall come into force retrospectively from 23 March, 2020.

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