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Siddharth Gambhir
| Updated: 29 Mar, 2020 | Category: Goods and Service Tax, Taxation

Aadhar Based Authentication And Physical Verification Under GST

Aadhar Based Authentication

In a recent notification dated 23.03.2020, the central government has notified class of persons who shall be undergoing Aadhaar based authentication for the purpose of GST Registration. Also, central government as amended rules relating to physical verification. These steps have been taken to prevent fraudulent persons from getting registered under GST and to curb fake invoicing and fraudulent passing of ITC by fraudulent businesses.

Knowledge Dashboard Contains

  • Applicability of Aadhar Based Authentication
  • When does Aadhar Based Authentication Come into effect?
  • Meaning of Physical Verification under GST
  • What if a person fails to undergo Aadhar Based Authentication?
  • What are the circumstances under which Physical Verification of the place of business can be done?

Applicability of Aadhar Based Authentication

With effect from 01.04.2020, Aadhar Based authentication for the purpose of GST Registration will be implemented for the following categories of persons:

  • Individuals
  • Authorised Signatory of all types
  • Managing and Authorised partner and
  • Karta of a Hindu Undivided Family
Note: It shall not apply anybody who is not a citizen of India or any class of person other than those mentioned above.

When Does Aadhar Based Authentication Come Into Effect?

Aadhar Based Authentication shall come into effect from 01.04.2020. To bring this into effect, in Central Goods and Service Tax Rules, 2017[1], the amendment has been made in Rules 8, sub-rule (4) by inserting a sub-rule (4A).

Meaning of Physical Verification

It simply means that proper officer has the power to visit the place of business of the applicant or registered person and inspect the documents, take photographs and prepare a verification report.

What if a person fails to undergo Aadhar Based Authentication?

When a person fails to undergo Aadhar Based Authentication, registration, in that case, will only be granted after physical verification is done in the presence of the applicant. Physical verification of place of business shall be done not later than 60 days from the date of application in the same manner as provided under rule 25.

What are the circumstances under which physical verification of the place of business to be done?

  • Failure of Aadhar Authentication:

Where the proper officer is satisfied the physical verification of the place of business needs to be done due to failure of Aadhaar authentication, he shall conduct physical verification before granting of registration.

  • Any other reason:

Even if after the grant of registration, if the officer is of the opinion that physical verification of the place of business needs to be done, he has the power to conduct this.

Verification report along with the documents and photographs shall be uploaded in FORM GST REG – 30 on the common portal. This report needs to be uploaded within a period of 15 days from the date of verification.

Note: Earlier, the rule provided for physical verification only after the grant of registration. Now the rule is amended to provide for physical verification before granting of registration as well.

Conclusion

To conclude, to curb the malpractices of operating fraudulent businesses and fake invoicing, the Central Government has made above changes for the better and smooth operation of the whole GST System. This step is a welcome step on behalf of the government to Curb Tax Evasion.

Read our article:GST Registration: Aadhaar Verification To Be Effective From April 1, 2020

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Siddharth Gambhir

Mr. Siddharth Gambhir is a Chartered Accountant by profession and also holding post-graduate degree in Finance and Taxation. He is an Advisory consultant at Corpbiz with experience in Taxation and Auditing.Holding experience in Taxation and Auditing, he holds keen interest in writing new content by updating himself with the latest changes.

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