Finance Ministry has notified new norms for GST registration. It expects this wouldhelp in checking the menace of fake invoices.

According to new norm, if the applicant has opted for Aadhaar based authentication, then every application will be followed by biometric-based Aadhaar authentication and taking photograph. In case the applicant does not go for first option, then the process involves taking biometric information, photograph and verification of various KYC (Know Your Customer) documents.

Authentication will be done at one of the Facilitation Centres notified by the Commissioner. This amendment will come into effect from a date to be notified in near future after setting up of facilitation centres on the lines of Passport Seva Kendras or Aadhaar Seva Kendras. New norms have been prepared on the basis of recommendations of Law Committee of GST Council.


The new timeline for grant of registration for Aadhaar authenticated applicant is now 7 days for proper scrutiny of application. To counter the cases of fake invoices, in a few risky cases where a person has successfully undergone Aadhaar authentication, some additional physical verification may be carried out with the approval of an officer, authorized by the Commissioner. The timeline for grant of registration in such cases would now be of 30 days.

Under the new arrangement, the suspension and cancellations would be based on data analytics and mismatches. A registration now is also liable for cancellation where the input tax credit is availed in violation of provisions of the CGST Act or the details of outward supplies in FORM GSTR-1 are in excess to the outward supplies declared in FORM GSTR-3B, for one or more tax periods. Such cases lead to ITC (Input Tax Credit) being passed or availed without payment of tax and would, therefore, be liable for cancellation of registration. During the proceedings of cancellation, these taxpayers would remain suspended.

ITC eligibility limit

A provision has been made in rules to deter dummy businesses. The present eligibility limit of availing 10 per cent ITC by a registered person in respect of invoices where the details have not been furnished by his suppliers would be reduced to 5 per cent with effect from January 1. Tax Department says, this would facilitate small and medium suppliers to upload invoices monthly while filing return quarterly under new Quarterly Return Filing and Monthly Payment (QRMP) of Taxes scheme. This would ensure that large taxpayers continue to procure from small taxpayers.

To curb fake ITC availment and passing on of such credit by unscrupulous persons who generally pay no tax in cash, particularly in those risky cases where GST turnover does not match with the income tax returns and where the value of taxable supply other than exempt supply and zero-rated supply in a month exceeds Rs. 50 lakh, such registered person will not be able to use the amount of ITC available in electronic credit ledger to discharge his liability towards output tax in excess of 99 per cent of such tax liability. At least 1 per cent liability would need to be discharged in cash. This change will come into effect from 1st January 2021.

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