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

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Five States Show Interest in Aadhaar-Based Authentication for GST Registration: In a recent development, several Indian states, including Karnataka, Tamil Nadu, and Telangana, have expressed keen interest in leveraging Aadhaar-based authentication for GST registration. Additionally, Gujarat, Andhra Pradesh, and the Union Territory of Puducherry have initiated trials for Aadhaar identification.

Exploring Biometric Authentication for GST Registration

At the third National Coordination Meeting of Central and State GST officers, the discussion revolved around adopting biometric-based confirmation for GST registration. States considering this approach are assessing the associated infrastructure and staffing requirements. They aim to formulate comprehensive proposals for Cabinet approval.

Current Authentication Method and Challenges

Presently, GST officials utilize OTP-based Aadhaar authentication to verify the identities of registration applicants. However, this method has been prone to abuse, with instances of fraudulent registrations for claiming Input Tax Credit (ITC) using others’ identities.

Benefits of Aadhaar-GST Implementation

States like Karnataka, Uttar Pradesh, Tamil Nadu, and Maharashtra, leading in GST revenue generation, stand to benefit significantly from this system overhaul. By ensuring more accurate tax collection and safeguarding against fraudulent activities, this move promises to fortify revenue streams. The notable surge in April GST revenues, crossing the Rs 2 lakh crore mark, underscores the urgency for tighter registration processes.

Understanding GST Registration

GST registration is mandatory for businesses with an annual turnover exceeding Rs 20 lakh. It involves obtaining a unique 15-digit number from the Central Government. Transactions between states incur Integrated Goods and Services Tax (IGST), while transactions within states attract Central GST (CGST) and State GST (SGST). GST eliminates the cascading effect of taxation. Non-resident businesses operating in India must also register for GST, irrespective of their sales volume. Failure to comply with GST regulations results in penalties.

Aadhaar-based Authentication Process

Aadhaar-based authentication verifies identity using Aadhaar numbers through a two-step process involving biometric and demographic information. Biometric data comprises fingerprints, iris scans, and facial recognition, while demographic data includes name, date of birth, gender, and address. This real-time process occurs on registered devices and ensures privacy without disclosing personal details. The authentication process is cost-effective and simple, with verified data retained for six months, as per UIDAI guidelines.

State Initiatives and Assessments

These states are evaluating the costs, infrastructure requirements, and manpower needed for implementing biometric authentication for GST registration. Once assessed, proposals will be presented to state Cabinets for approval.

Record Growth in GST Collection

In April, Goods and Services Tax collections soared to a record high of Rs 2.10 lakh crore, marking a 12.4% growth. This increase is attributed to robust economic activity, increased domestic transactions, and higher imports.

By integrating Aadhaar-based authentication into the GST registration process, India aims to streamline tax administration, enhance compliance, and curb fraudulent practices, ultimately contributing to the nation’s economic growth.

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