Sub-title: The Court directs GST authorities nationwide to stop granting fresh registrations without biometric-based Aadhaar authentication amid concerns over fraudulent use of PAN and Aadhaar details.
High Court Mandates Biometric Aadhaar Authentication
The GST Biometric Aadhaar Verification requirement will now apply to fresh GST registrations across the country following a direction from the Delhi High Court. The Court ordered GST authorities not to grant any fresh registration unless the applicant completes biometric-based Aadhaar authentication.
A division bench comprising Justice Anil Khetarpal and Justice Shail Jain issued the direction while addressing the continuing problem of fraudulent GST registrations obtained through the misuse of PAN and Aadhaar details belonging to unsuspecting individuals.
The Court sought nationwide implementation of the authentication requirement to prevent such personal details from being used for securing fraudulent GST registrations.
Thousands of Fraudulent GST Registrations Detected
The bench referred to figures placed before the Rajya Sabha by the Union Minister of State for Finance concerning fraudulent GST registrations and the resulting tax evasion.
According to the data, authorities detected 2,800 fraudulent GST registrations involving stolen or frozen PAN and Aadhaar details during 2023-24. These registrations involved tax evasion amounting to ₹15,085 crore.
During 2024-25, authorities identified another 1,654 fraudulent registrations, involving ₹13,109 crore in tax evasion.
Court Notes Incomplete Implementation
The Court took note of the Government’s statement that biometric Aadhaar authentication had been made mandatory for GST registration.
However, the bench observed that more than a year later, authorities apparently had not implemented the measure in its entirety.
The Court remarked:
“It appears that despite passage of more than one year, the statement given by the minister on the floor of the house has not been fully implemented.”
The bench also recorded that counsel representing the authorities could not identify any practical difficulty that would prevent biometric Aadhaar authentication from becoming compulsory for GST registrations.
No GST Registration Without Biometric Aadhaar Verification
In view of these circumstances, the Delhi High Court issued a nationwide direction to the authorities.
It directed authorities:
“across the country not to allow any GST Registration without biometric based AADHAR authentication henceforth.”
Accordingly, GST authorities must ensure biometric-based Aadhaar authentication before granting fresh GST registrations.
At the same time, the Court permitted the authorities to bring any practical difficulties arising from implementation of the requirement to its attention.
Court Considers Additional Fraud Prevention Measures
The bench also asked the authorities to consider measures proposed by Senior Advocate Tarun Gulati.
The suggestions concern steps that could prevent misuse of individuals’ PAN and Aadhaar particulars for obtaining fraudulent GST registrations.
The Court has not concluded proceedings in the matter and will consider it again on the next date of hearing.
Nationwide Verification Requirement
The GST Biometric Aadhaar Verification direction requires authorities across India to ensure biometric authentication before allowing fresh GST registrations. The Court has also allowed the authorities to report any practical difficulties that may arise during implementation.
Matter Listed for September 22
The Delhi High Court has scheduled the matter for its next hearing on September 22, 2026.
The authorities may place before the Court any practical difficulties encountered while implementing the nationwide biometric-based Aadhaar authentication requirement.
