Government is making all the efforts to sync all the statutory information of a person through one common source. For this purpose, Aadhar number is used as a base. Over the period of time, linking of Aadhaar Number has been made mandatory at various places such as Bank Accounts, Income Tax portal etc.
In this direction, a minor but the most major change has been made in the GST registration process vide Notification No. 62/2020- Central Tax dated 20th August 2020 with effect from 21st August, 2020.
Under GST also, a new feature of “Aadhaar Authentication” has been added to GST Registration process. In this article we will have a detailed look at amendments made in GST registration.
1. What is Aadhaar Authentication under GST?
Aadhar Number is alloted by Unique Identification Authority of India. For the purpose of allotment, the system captures biometric details of a person such as Fingerprints and Retina and same are stored in Central Identities Data Repository (CIDR) database alongwith other information such as Name, date of Birth and address of the person.
Aadhaar authentication is a process through which the system submits Aadhaar number along with other biometric details of the Aadhaar holder to the Central Identities Data Repository (CIDR) for verification purposes. If information entered in a system matched with CIDR database then then the system will validate the data. This will help in inter linking of information submitted to different authorities and also keep a check on the malpractices happening under the Goods and Services Tax.
2. GST Registration Process through Aadhar Authentication
Application for GST registration is filed in following two parts:
- Part-A: Wherein PAN, Mobile Number and email Id of proposed GST registration is validated. Post validation, the system generated a Temporary Reference Number (“TRN”) which remains valid for 15 days and it is to be used further to fill Part-B of registration form. Post validation, no Changes can be made in Part-A.
- Part-B: Person is required to enter detailed information related to business, promotors, place of business etc. along with supporting documents.
In Part-B, While updating information related to promoters/Directors/Partners/proprietors, a person is required to enter Aadhar number.
However, In Part B of FORM GST REG-01, in the table “Promoter / Partners”, the field “Aadhaar Number” has been disabled and cannot be filled up anymore, although it was not compulsory to fill this field earlier also. Altogether, the below new tab of “Aadhaar Authentication” has been added in the GST Registration process.
However, it is not mandatory to carry out Aadhaar Authentication and a person may opt to continue the registration process through earlier process.
Therefore, now the applicant have following 2 options for GST registration:-
2.1 Option 1: GST registration through authentication of Aadhaar number
First option available to the applicant is to authenticate the information entered through validation of Aadhar Number. However, still it is not mandatory to opt for this option and the applicant may continue to opt registration through old process.
2.1.1 Procedure of GST registration through Aadhar Authentication
Step 1: In “Promoters/Partner’s” Tab, at Aadhaar Number, system will pop following message:
“A separate process of Aadhaar authentication has been implemented. You are requested to provide your Aadhaar through the link sent at your Mobile No. and e-mail (furnished with registration details) on submission of the registration application“
Step-2: While filing details of Promoters/Directors/Proprietors in Part-B, you are required to enter a valid mobile number and email id which are linked with Aadhar Number as Aadhaar Authentication link and OTPs will be received on such email id or phone number.
Step-3: After entering all the informations in relevant tabs, under “Aadhaar Authentication” Tab, system will ask you “would like to opt for Aadhar Authenication of promoters/partners, Authorised Signatories?”
Please note that the process of Aadhaar Authentication starts after submission of application for GST registration and registration is considered as completed only after completion of Aadhar authentication process. .
Step:4 Upon selection of yes in “Aadhaar Authenication” tab, system will pop following warning message:
“You have opted “yes”, please make sure that Aadhaar Authentication through the link provided on Mobiles/email of promoters/partners, Authorised Signatories are completed, so that registration process may be completed”
Step:5 Upon submission of application for GST registration, system will send an Aadhaar Authentication link on email Id and phone numbers of all partners/promoters/directors/authorised signatories. After clicking on such a link, the process of aadhar authentication shall start and the system will show :
- GSTIN,
- Legal Name of Business,
- Name of primary Authorised signatory and
- Your name given in the registration application.
Further, system will ask for consent to carry out Aadhaar Authentication and also ask to enter Aadhar Number.
Step:6 After entering Aadhar Number, applicant shall click on “Validation Aadhar Number”
Step:7: After validation of Aadhar Number, system will send OTP on mobile number registered with Aadhar number and applicant shall enter the OTP to validate the same.
Step:8 Upon validation of OTP, the system will reflect the message of successful authentication of Aadhaar Number.
2.1.2 Date of submission of application for GST registration
In option I, date of submission of application of GST registration shall be earlier of following dates:
- Date of completion of Aadhaar Authentication or
- Expiry of 15 days from date of submission of application for GST registration
Therefore, the department will start processing applications for GST registration only after completion of Aadhaar Authentication or after expiry of 15 days from date of submission of application.
2.2 Option:2 GST registration without Aadhar Authentication i.e. GST registration by physical verification
If an applicant don’t opt for GST registration through Aadhar Authentication or fails to complete the authentication process within 15 days from date of submission of application, in both the cases, registration under GST shall be granted only after carrying out physical verification of place of business by concerned GST officer in presence of applicant.
2.3 Steps of GST registration by physical verification
After entering information under all tabs, application may select “No” for “would like to opt for Aadhar Authentication of promoters/partners, Authorised Signatories?” and system will reflect the following warning:
“You have selected ‘No’ for Aadhaar Authentication, therefore, approval of your registration application may include site verification of the business premises by the tax office and/ or request to submit additional documents. You will receive further communication from the tax office.”
“If you select ‘No’ the facility of deemed approval within 3 working days shall not be available and the Registration shall be issued only after the site verification and approval of the officer.”
3. Steps for processing of GST registration application by concerned GST officer
3.1 GST Registration with Aadhaar Authentication
- After completion of Aadhaar Authentication process, concerned GST officer shall scan the application and if finds any deficiency, shall issue the notice within 3 working days from date of completion of Aadhaar Authentication.
- Post receipt of notice by the applicant, he shall file the necessary clarification within within 7 working days from the date of the receipt of such notice.
- If the proper officer is satisfied with the clarification provided by application then he may approve the GST registration. Otherwise, he may reject the registration application within 7 working days from the date of the receipt of such clarification
3.2 GST Registration without Aadhaar Authentication
- Post receipt of application, concerned GST officers shall carry out the physical verification of principal place of business in presence of applicant. Please note that no time limit is given for carrying out physical verification of premises. However, action of grant of GST registration or issue deficiency memo is to be taken by the concerned officer within 21 days.
- He shall submit the verification report along with photographs of premises and other documents on the common portal within 15 working days from date of verification.
- Thereafter, the concerned GST officer shall scan the application and if finds any deficiency, shall issue the notice within 21 days from date of submission of application.
- Post receipt of notice by the applicant, he shall file the necessary clarification within 7 working days from the date of the receipt of such notice.
- If the proper officer is satisfied with the clarification provided by application then he may approve the GST registration. Otherwise, he may reject the registration application within 7 working days from the date of the receipt of such clarification
4. Deemed Approval of GST Registration:-
If a concerned officer fails to take necessary action within permitted time then application for GST registration shall be deemed to be approved.
Provisions till 21st August, 2020:
- If a concerned officer fails to take action within 3 working days from date of submission of application or within 7 working days from date of filing clarification by the applicant.
21st August, 2020 onwards:
- GST Registration with Aadhar Authentication:
If a concerned officer fails to take action within 3 working days from date of submission of application or within 7 working days from date of filing clarification by the applicant.
- GST Registration without Aadhar Authentication:
If a concerned officer fails to take action within 21 days from date of submission of application or within 7 working days from date of filing clarification by the applicant.
5. Mandatory GST Registration through Aadhaar Authentication
In accordance with Notification No. 19/2020 – Dated: 23-3-2020 read with Section 25(6B) and Section 25(6C) of the CGST Act, for the purpose of GST Registration, following persons are compulsorily required to carry out Aadhaar authentication:
- Authorized signatory of all types
- Managing/authorized partners of a partnership firm
- Karta of a Hindu Undivided Family
Therefore, if a partnership firm is having 2 or more partners and only one partner is appointed as managing partner then Aadhaar authentication is required to be carried out only such managing partner and other partners are free from this requirement of aadhaar Authentication.
Similarly, in case of registration of a company under GST, Aadhar authentication is required only of authorised signatory and not all the directors of the company.
6. Exemption from Aadhar Authentication
As per section 25(6D) of CGST Act read with Notification No. 17/2020 – Central Tax dated 23th March, 2020, Following persons are exempt from requirement of Aadhaar Authentication:
- An individual who is not a citizen of India or
- Any person other than the one following persons:
- Individual
- Authorized signatory of all types
- Managing/authorized partners of a partnership firm
- Karta of a Hindu Undivided Family
Therefore, in case of Company, all directors other than authorised signatory are exempted from requirement of Aadhaar Authentication. Similarly, in case of Hindu Undivided family, Aadhaar Authentication shall be carried out only of Karta and not other members of HUF.
