No GST registration w/o Aadhaar biometric auth

The Delhi High Court recently ruled that all GST registrations must now be conducted using biometric-based Aadhaar authentication. This interim judgment, issued by Justices Anil Kshetarpal and Shail Jain, directs all authorities to halt any GST registrations without this verification. The decision comes following two cases where dishonest individuals obtained GST registrations in the names of others, using their PAN/Aadhaar information, and subsequently generated tax liabilities.

The government's response noted that biometric Aadhaar authentication is only implemented when the system identifies a case as risky based on data analytics. However, the Minister of State in the Ministry of Finance revealed that in 2023-2024, there were 2,800 fraudulent GST registrations due to stolen or frozen PAN/Aadhaar details, resulting in tax evasion of Rs 15,085 crore.

Similarly, in 2024-2025, 1,654 fraudulent GST registrations were detected, leading to tax evasion of Rs 13,109 crore. The court expressed concern that the government's stated commitment to this measure has not yet been fully implemented, allowing fraudulent registrations to continue. The Delhi High Court is urging authorities to address this issue promptly and consider the suggestions provided by senior counsel Tarun Gulati, which include mandatory facial recognition during the registration process, video-based verification of PAN and Aadhaar, and recording relevant data for dispute resolution.