In a response to a Rajya Sabha unstarred question, the Ministry of Finance confirmed the nationwide implementation of Aadhaar-based biometric authentication for GST registration. This phased rollout, which began with a pilot project, has been completed across all states and union territories as of May 1, 2025. The ministry also detailed the use of various data analytics tools to combat fake Input Tax Credit (ITC) claims. These tools use automated risk assessments and flag mismatches, and are designed to detect fraud across different commodities and taxpayer types, not just regional patterns. To ensure officials are equipped to handle complex fraud, the Central Board of Indirect Taxes and Customs (CBIC) regularly issues instructions and guidelines to field formations.
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
RAJYA SABHA
UNSTARRED QUESTION NO. 2644
ANSWERED ON 12/08/2025
Aadhar based authentication for GST registration
2644 Shri G.C. Chandrashekhar:
Will the Minister of FINANCE be pleased to state:
(a) whether Government has any plan to implement the pilot project of Aadhar- based authentication for GST registration in Karnataka beyond the current testing phase;
(b) if so, the details thereof;
(c) whether the specific data analytics and risk parameters being used to detect fake ITC in Karnataka;
(d) if so, whether these mechanisms are likely to be tailored further to address regional challenges and patterns and if so, the details thereof; and
(e) the manner in which Government is ensuring adequate resources and training for GST officials in Karnataka to effectively combat sophisticated fraud schemes?
ANSWER
THE MINISTER OF STATE IN MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) & (b): Yes. Biometric-based Aadhaar authentication for GST registration, as mandated under Rule 8 of the CGST Rules, 2017, has been rolled out across States and Union Territories in a phased manner, depending on the readiness of the respective tax administrations. As of 01/05/2025, the implementation has been completed in all States and UTs in India.
(c) & (d): Various tools for GST analytics, such as automated risk assessment based on compliance attributes of taxpayers, highlighting of outliers based on system-flagged mismatches, etc., have been made available to GST administrations including Karnataka, to detect fake ITC. These tools are designed to combat GST fraud and various modus operandi, as highlighted from time to time, whether based on commodity, type of taxpayers, or any other relevant factor, and are not limited to regional patterns.
(e) Necessary instructions and guidelines are issued to field formations by CBIC from time to time.
