Gujarat's Aadhaar-Based Verification to Curb Bogus GST Registrations To Be Adopted By Other States

Ahmedabad: The GST Seva Kendra (GSK) project of the Gujarat government which uses Aadhaar-based verification to detect bogus GST registrations will be replicated across the country with the newly-launched face authentication feature, state Finance Minister Kanubhai Desai said on Monday.

According to the minister, Gujarat on Monday became the first state in the country to introduce face-identification verification through Aadhaar to streamline the GST registration process and tackle fraudulent activities.

Notably, the state government started GSKs across 12 largest business centres last November to curb bogus Goods and Services Tax registrations using the Aadhaar-based verification process, becoming the only state in the country to do so.

These GSKs were launched by Union Finance Minister Nirmala Sitharaman.

"The success of the pilot project has been acknowledged by other states as well. GST officials and finance ministers of various states visited our GSKs, and it was decided in the 53rd GST Council meeting on June 22 to replicate Gujarat's GSK (model) across the country," Desai said.

The verification process has deterred those who applied for bogus GST registration by using Aadhaar cards of economically weak people and changing mobile numbers linked to them, he said.

Speaking at the event to launch Aadhaar-based identity verification through face authentication, Desai said, "This has been launched for the first time in Gujarat, and will be implemented across the country. All these new changes are aimed at ensuring ease of doing business and controlling bogus billing".

The new process will further reduce processing time at the GSKs and streamline the process which will eventually reduce bogus GST registration, Desai said.

The state GST Department had prepared a blueprint for Aadhaar-based identity verification after several cases of bogus GST registration numbers being used to issue fake bills and pass bogus input tax credit (ITC) surfaced, causing huge loss to government exchequer, according to a statement.

The blueprint to effectively curb the practice of bogus billing through Aadhaar-based biometric authentication was submitted to the Central government, which accepted it and launched the same on a pilot basis in Gujarat last year, the department said.

Verification has been done through 12 GSKs across different business centres in the state using iris and fingerprint scans. Using further advanced technology, face authentication will be conducted now for the process, it said.

The implementation of the Aadhaar-based authentication process for GST registration has led to a 24.30 per cent decline in registration applications from November 2023 to date compared to the same period last year, the department said, reflecting the success of the process.

With the implementation of GST completing seven years on July 1, 2024, the number of active taxpayers in Gujarat has risen from around 5 lakh in July 2017 to nearly 12 lakh on July 1, 2024, officials said.

(Except for the headline, this story has not been edited by Republic and is published from a syndicated feed.)