Aadhaar authentication of taxpayers made mandatory for claiming GST refunds

The notification also states that from January 1, 2022, businesses who have failed to file summary return and paying monthly GST will not be able to file GSTR-1 sales return of the succeeding month.

This CBIC notification puts into effect decisions taken at the meeting of the GST Council in Lucknow on September 17.

“To arrest tax evasion, the government has made Aadhaar authentication for proprietor, partner, karta, Managing Director, whole time Director, and authorised signatory compulsory before filing an application for revocation of cancellation registration and refund application,” AMRG & Associates Senior Partner Rajat Mohan told PTI.

The government has made Aadhaar authentication mandatory for a taxpayer to be able to claim refunds to prevent revenue leakage, EY Tax Partner Abhishek Jain told the news agency.

“The move will help in reducing cases of fraudulent refunds as only the verified taxpayers will obtain the refunds now,” Jain added.

On taxpayers who have defaulted on GSTR-3B of the previous month being barred from filing GSTR-1, Jain said this is a well thought restriction and a necessary control to eliminate the cases where taxpayers although report their supply invoices in GSTR-1 (due to constant follow ups from recipients’ side) but they do not submit their corresponding GSTR-3B return through which tax is actually paid to the government.

“Compliant taxpayers would appreciate this move as till now their input tax credit was also at risk in case vendors do not file their GSTR-3B even though such invoice is appearing in GSTR-2A,” he added.

Currently, the law restricts filing of return for outward supplies or GSTR-1 in case a business fails to file GSTR-3B of preceding two months. While businesses file GSTR-1 of a particular month by the 11th day of the subsequent month, GSTR-3B, through which businesses pay taxes, is filed in a staggered manner between 20th-24th day of the succeeding month.

(With PTI inputs)