Geotagging and biometric authentication: CBIC implements measures to weed out bogus entities and fake GST claims

In an effort to eradicate fraudulent entities registered under the Goods and Services Tax (GST) system and prevent false input tax credit (ITC) claims, the government is implementing new measures. CBIC Chairman Vivek Johri announced that geotagging of company addresses will become mandatory, while biometric authentication will be compulsory for entities deemed risky.

Johri said, "We are focused on strengthening the GST system. The verification process for new entity registrations needs further enhancement. Currently, we authenticate the person's identity through OTP-based authentication using Aadhaar and PAN. However, for risky entities, we will introduce biometric authentication. In suspicious cases, individuals will be required to undergo biometric authentication."

According to the GST law, businesses must have a physical place of operation. However, there have been instances where the provided addresses were found to be bogus. Johri highlighted the initiation of pilot projects in 2-3 states to geotag addresses, ensuring accurate location information.

This move aims to counter situations where offices are created solely for verification purposes, but cease to exist afterward. Making the geotagging of office locations mandatory will help prevent such malpractice.

The pilots will be followed by an evaluation of infrastructure requirements, and further details will be finalised. The GST Council, during its 49th meeting in Delhi, approved these pilot initiatives as part of ongoing efforts to strengthen the GST system.

The biometric authentication of authorised representatives or directors or partners of a company will be made for new registration applications and existing businesses registered under Goods and Services Tax (GST) if tax officers have a suspicion that the entities are being set up only to fraudulently claim ITC.