Five States Show Interest in Aadhaar-Based Authentication for GST Registration

May 14, 2024

According to an official statement, five Indian states, such as Karnataka, Tamil Nadu, and Telangana, have shown interest in using Aadhaar-based authentication for GST registration. Additionally, Gujarat, Andhra Pradesh, and the Union Territory of Puducherry have started testing Aadhaar identification.

Biometric Authentication for GST Registration

At the third National Coordination Meeting of Central and State GST officers, biometric-based confirmation for GST registration was talked about. The states that are thinking about this system want to figure out how much the infrastructure and staffing needs will cost. They will be given information that will help them make a good proposal that their Cabinets will accept.

Current Authentication Method

Currently, OTP-based Aadhaar authentication is used by GST officials to verify the identities of people who want to register. However, this method has been abused, with people using other people’s names to create fake businesses to claim Input Tax Credit (ITC).

Aadhaar-GST Implementation Benefits

Karnataka, along with Uttar Pradesh, Tamil Nadu, and Maharashtra, which brought in the most GST money in April, could especially benefit from this change in the system, which would make tax collection more accurate and protect against scams. Due to strong economic growth and more imports and domestic activities, April GST revenues were higher than the Rs 2 lakh crore mark. This makes the possible benefits of tighter GST registration based on Aadhaar even stronger.

What is GST registration?

Businesses that make more than Rs 20 lakh a year have to register for GST. It is a 15-digit number that the Central Government gives you. IGST is charged on transactions between states, and CGST and SGST are charged on transactions within states. GST helps get rid of the “cascading effect” or tax on tax. Not all things and services are affected by it, but some are. No matter how much they sell, non-residents who sell in India need to register for GST. Businesses that aren’t registered can’t charge GST to their customers. There are times when cancellation is possible. People who don’t follow the rules are punished.

About Aadhaar-based authentication

Aadhaar-based authentication is a process where Aadhaar numbers are used to confirm one’s identity. Biometric and demographic information are both needed for the two-step method. Biometric data includes fingerprints, an eye scan, and a picture of your face. Demographic data includes your name, date of birth, gender, and address. The process happens in real-time on a gadget that has been registered. Authentication doesn’t give away anyone’s personal information or name. The process is easy and doesn’t cost much. According to UIDAI, verified data can be kept for 6 months.

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