Section 25 of CGST Act 2017 prescribes the manner of application for registration under the act. At the time of commencement of application of Act, Aadhaar authentication was not mandatory for registration under GST. However, due to big-bang defaults, ITC frauds through dummy firms, fake refunds, fake invoice mobilisation, government brought the legislation for authentication of personal data of applicant from Aadhaar Database which at-least ensure that the person was in knowledge of the fact that he or someone else is applying on behalf on him.
In most of default cases, it is found that the owner of firms were either missing or unaware that they are registered under GST. Some people wrongfully used their PAN details and then, were playing with GST like fake invoicing, fake ITC transfers etc.
To curb this all (to whatever extent), government, through Section 95 of Finance Act 2019 (No. 2) amended the Section 25 and added the following sub-sections (reproduced as it is):-
“(6A) Every registered person shall undergo authentication, or furnish proof of possession of Aadhaar number, in such form and manner and within such time as may be prescribed:
Provided that if an Aadhaar number is not assigned to the registered person, such person shall be offered alternate and viable means of identification in such manner as Government may, on the recommendations of the Council, prescribe:
Provided further that in case of failure to undergo authentication or furnish proof of possession of Aadhaar number or furnish alternate and viable means of identification, registration allotted to such person shall be deemed to be invalid and the other provisions of this Act shall apply as if such person does not have a registration.
(6B) On and from the date of notification, every individual shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number, in such manner as the Government may, on the recommendations of the Council, specify in the said notification:
Provided that if an Aadhaar number is not assigned to an individual, such individual shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification.
(6C) On and from the date of notification, every person, other than an individual, shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number of the Karta, Managing Director, whole time Director, such number of partners, Members of Managing Committee of Association, Board of Trustees, authorised representative, authorised signatory and such other class of persons, in such manner, as the Government may, on the recommendations of the Council, specify in the said notification:
Provided that where such person or class of persons have not been assigned the Aadhaar Number, such person or class of persons shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification.
(6D) The provisions of sub-section (6A) or sub-section (6B) or sub-section (6C) shall not apply to such person or class of persons or any State or Union territory or part thereof, as the Government may, on the recommendations of the Council, specify by notification.
Explanation.—For the purposes of this section, the expression “Aadhaar number” shall have the same meaning as assigned to it in clause (a) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.”.
These provisions are brought into application w.e.f. 01/01/2020 through CGST notification no. 1/2020.
However, the rules prescribing manner and other procedures regarding the same are inserted with effect from 1st April 2020. Hence, practically these provisions are applicable w.e.f. 1st April 2020 only.
On 23rd March 2020, CBIC issued following notifications for notifying date of applicability of rules of Aadhaar authentication:-
- CGST-17/2020 : Seeks to specify the class of persons who shall be exempted from Aadhaar authentication.
- CGST-18/2020 : Seeks to notify the date from which an individual shall undergo authentication, of Aadhaar number in order to be eligible for registration.
- CGST-19/2020 : Seeks to specify class of persons, other than individuals who shall undergo authentication, of Aadhaar number in order to be eligible for registration.
As per Section 25 (6D), government may specify the class of persons who shall be exempted from Aadhaar authentication. Notification CGST-17/2020 specify such persons as per below:-
- Any person who is not a citizen of India;
- Any person other than :-
- Individual;
- authorised signatory of all types;
- Managing and Authorised partner; and
- Karta of an Hindu undivided family.
Apparently, it excludes only those persons who are not eligible for registration under Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.
Other than above class of persons, Aadhaar authentication is mandatory w.e.f. 1st April 2020 as per the manner given below:
a) in case of Proprietary concerns, by individual himself.
b) in case of other than Proprietary concerns:-
- authorised signatory of all types;
- Managing and Authorised partners of a partnership firm; and
- Karta of an Hindu undivided family.
Alternative means of authentication where Aadhaar number not assigned to any person:-
Rule 9 of CGST Rules 2017 has been amended to provide alternative means of authentication where Aadhaar number not assigned or Aadhaar authentication failed due to any reasons.
As per amended rule, where a person, (other than those exempted from Aadhaar authentication), fails to undergo authentication of Aadhaar number, then the registration shall be granted only after physical verification of the principle place of business in the presence of the said person, not later than sixty days from the date of application, in the manner provided under rule 25.
It is worth to note that there is long period of 60 days provided to department officers for physical verification of place of business. So, in case Aadhaar authentication failed due to any reason, it may take more than 2 months period to get registration certificate under GST.
It is further provided that in case Aadhaar authentication failed, provisions for deemed approval within three days will not be applicable. (Provisions for deemed approval are applicable in case proper officer “neither approve nor reject” the application for registration under GST within three working days).
Rule 25 of CGST Rules 2017 has also been amended to bring it into synchronisation with above provisions, which is reproduced below:-
“Physical verification of business premises in certain cases.- 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 a period of fifteen working days following the date of such verification.”.
Aadhaar Authentication for Already Registered Persons
Sub-Section (6A) of Section 25 of CGST Act 2017 provides for Aadhaar authentication of all the persons already registered under GST. However, rules to prescribe form, manner and time to comply with the provision are not available till date.
It is further provided for already registered persons that, in case of failure of Aadhaar authentication, registration allotted to such person shall be deemed to be invalid and the other provisions of this Act shall apply as if such person does not have a registration.
Hence, It is strongly recommended that all the persons who would be require to comply with Aadhaar authentication provisions as per above, must have updated details with Aadhaar database.
GSTN Advisory for New Registration
Lately, the GSTN has issued advisory for Aadhaar Authentications in Form GST REG-01, during Registration, for all type of taxpayers (except PSU, Govt Bodies, Statutory Body and Local Authority).
It has released functionality for new registration as per given below: –
- For Taxpayers applying for a new registration and opting for Aadhaar Authentication, the authentication would now be required to be done only for one Primary Authorized Signatory and one Promoter/Partner, (instead of all Authorized Signatories and Partners/Promoters, hitherto).
- If Taxpayer has not opted for Aadhaar Authentication while applying for a new registration and if a SCN is raised by Tax-officer, on Aadhaar Authentication tab, taxpayer will be able to upload E-KYC documents while filing clarification. This upload of E-KYC documents can also be done by the Tax Official (on behalf of the taxpayer) doing site verification.
Note: If same person is Primary Authorized Signatory and Partner/Promoter, Aadhaar authentication is only required to be done for that person.
GSTN Advisory for Aadhaar Authentication / e-KYC for Existing Taxpayers on GST Portal
Functionality for Aadhaar Authentication and e-KYC (where Aadhaar is not available), has been deployed on GST Common Portal w.e.f. 6th January, 2021, for existing taxpayers. All taxpayers registered as Regular Taxpayers (including Casual Taxable person, SEZ Units/ Developers), ISD and Composition taxpayers can do their Aadhaar Authentication or e-KYC on GST Portal. This is not applicable for Government Departments, Public Sector Undertakings, Local Authorities and Statutory Bodies.
If Aadhaar is available, the Primary Authorized signatory and one person who is Proprietor/Partner/Director /Managing Partner/ Karta of the entity registered can go for the Aadhaar Authentication.
In absence of Aadhaar, they can upload any of the following documents to undergo e-KYC:
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- •Aadhaar Enrolment Number
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- •Passport
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- •EPIC (Voter ID Card
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- •KYC Form
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- •Certificate issued by Competent Authority
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- •Others
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How to do Aadhar Authentication/ e-KYC on Portal
When an existing registered taxpayer would login, a pop-up with Question will be shown “Would you like to authenticate Aadhaar of the Partner/Promotor and Primary Authorized Signatory “ with the two options “Yes, navigate to My Profile” and “Remind me later”.
If taxpayer clicks on “Remind me later” pop up will be closed and user can navigate anywhere on the GST portal.
If taxpayer clicks on “Yes, Navigate to My Profile”, system will navigate to My Profile. In MY PROFILE, a new tab “Aadhaar Authentication status” has been shown from where link for Aadhaar Authentication to the Primary Authorized Signatory and one of promoters/partners as selected by him will be sent.
Note: If same person is Primary Authorized Signatory and Partner/Promoter, Aadhaar authentication is only required to be done for that person.
On the My profile page, in addition to SEND AADHAAR AUTHENTICATION LINK, UPLOAD E-KYC DOCUMENTS option would also be displayed to taxpayer from where they can upload the e-KYC documents on Portal. In this case, the process of e-KYC authentication would be subject to approval of uploaded e-KYC documents by Tax Official.
