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The Central Board of Indirect Tax and Customs (CBIC) had issued a notification on 23rd March 2020, about Aadhaar authentication for GST registration from 1st April 2020. 

The same has been amended vide notification 62/2020 dated 20th August 2020 to be made optional. The aadhaar authentication for GST registration is not required for non-residents, persons other than citizens of India and persons who have already been registered under GST.

What is Aadhaar Authentication?

Aadhaar authentication is a process by which the Aadhaar number along with other biometric details of the Aadhaar holder are submitted to the Central Identities Data Repository (CIDR) for verifying its correctness. The CIDR verifies the correctness of data on the basis of information available with it.

The main purpose behind the Aadhaar authentication is to create an online platform wherein the identity of Aadhaar holders can be validated anytime anywhere. This will keep a check on the malpractices happening under the Goods and Services Tax.

GST law on Aadhaar Authentication for GST registration

As per the latest notification, every applicant for GST registration can opt for the Aadhaar authentication. The exceptions are persons exempted by the Central government under the CGST Act or those who must mandatorily undergo the Aadhaar authentication under section 25(6C) of the CGST Act. The revised rule will be effective for applications made on or after 21st August 2020.

From 1st April 2020 upto 20th August 2020, all the applicants submitting registration application under GST had to mandatorily undergo Aadhaar authentication for obtaining registration.

The applicants who opt for it must submit an Aadhaar Card along with the application for registration under GST. After this, they need to e-verify the same on the GST portal. An OTP will be sent on the mobile number and email ID linked to the Aadhaar card. Only upon entering this OTP, the Adhaar will get e-validated.

After this, whenever a taxpayer files his returns or uses any services on the GST portal, an OTP will be sent on the mobile number and email ID, which is linked to its Aadhaar number. Only after entering this OTP, a taxpayer can proceed to file the return.

If a person fails to do an Aadhaar authentication when opted or has not opted for it, the registration will be granted after a physical verification is done of the principal place of business. The officers can instead verify the documents on obtaining a permission from the officer not below the rank of Joint Commissioner and in writing.

In such cases, a notice in form GST REG-3 within 20 working days from the date of submitting the application. The date of submission of application is earlier of the below two:

  • Date of Aadhaar authentication
  • Date after counting 15 days from the submission of Part B of form GST REG-01, being the registration application.

The assessee must reply within 7 working days from the date of receipt of notice in form GST REG-4.

Earlier, the registration would be granted only on physical verification of principal place of business within 60 days from the date of application.

If Aadhaar number is not allotted to a particular individual applying for registration under GST, then an alternate means of identification is made available to him like physical verification of place of business as per the CGST Rules.

Mandatory Cases of Aadhaar Authentication

As per Section 25(6C) of the CGST Act, the Aadhaar authentication is mandatory for the following class of individuals as per Rule 8 of the CGST Act in order to become eligible for the GST registration:

  1. Authorised signatory of all types
  2. Managing/authorised partners of a partnership firm
  3. Karta of a Hindu Undivided Family

Exceptions

The only exception is if an individual is not a citizen of India or he is a person other than the one mentioned below: 

  1. Individual
  2. Authorised signatory of all types
  3. Managing/authorised partners of a partnership firm
  4. Karta of a Hindu Undivided Family

Cases of Deemed approval of GST registration application

The application is deemed to be approved by the officer, if he fails to take action within the timelines given against the following cases:

     

    Case

    Timeline

    The person who has successfully completed Aadhaar authentication

    The person is exempted from the Aadhaar authentication requirement

    3 working days from date of submitting an application

    The person who has opted but failed to complete Aadhaar authentication and notice is issued in form GST REG-3

    Does not reply to the notice within 7 working days in form GST REG-4 from the date of receipt of notice

    The person has not opted for Aadhar authentication

    20 working days from date of submitting an application

    The person who has opted but failed to complete Aadhaar authentication, notice is issued in form GST REG-3 and the person has replied

    7 working days from the date of receipt of the response, information or the required documents

    Steps for Aadhaar Authentication

    The following steps must be followed to authenticate aadhaar number for GST registration for all the authorised signatories mentioned on the application.

    Step 1: On the submission of the application for registration, the authentication link shall be sent to the registered mobile number and email ID mentioned in the application.

    Step 2: Click on the link. A window opens up where the user must enter the aadhaar number and the OTP received on mobile number and the email.

    A confirmation message will be displayed for successful authentication.

    The user can get authentication link once again anytime later by visiting the GST portal. Go to My Saved Applications> Aadhaar Authentication Status> RESEND VERIFICATION LINK to obtain the new link.

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