Aadhaar-based authentication aims to combat fraudulent claims of input tax credit (ITC), according to the Finance Minister. This initiative is expected to significantly reduce the instances of fake invoicing and fraudulent ITC claims. The Directorate General of GST Intelligence (DGGI) has managed to recover over 12 percent of the dues, compared to the 2-3 percent recovery rate in previous years. By Press Release.

This announcement was made during the 53rd GST Council meeting held on June 22.

According to Money Control, the introduction of Aadhaar-based authentication aims to combat fraudulent claims of input tax credit (ITC), according to the Finance Minister. This initiative is expected to significantly reduce the instances of fake invoicing and fraudulent ITC claims.

This meeting marked the first GST Council session since the formation of the Modi government 3.0.

It saw participation from Union Minister of State for Finance Pankaj Chaudhary, the chief ministers of Goa and Meghalaya, deputy chief ministers from Bihar, Haryana, Madhya Pradesh, and Odisha, as well as finance ministers from various states and Union Territories, along with senior officials from the Ministry of Finance and state/UT governments.

The Finance Minister stated that Biometric-based Aadhaar authentication will be rolled out nationwide. This measure will assist in combating fraudulent input tax credit claims made through fake invoices.

The Ministry of Finance further clarified that the implementation of the biometric authentication system will occur in phases. Besides addressing ITC fraud, this system is also expected to enhance the GST registration process.

During a press conference following the meeting, Sitharaman also mentioned that the council has recommended amending the time limit for availing input tax credit under section 16(4) of the CGST Act retroactively. This amendment covers invoices or debit notes filed up to November 30, 2021, and pertains to the financial years 2017-18, 2018-19, 2019-20, and 2020-21.

Earlier this year, in April, Moneycontrol reported a significant increase in the recovery rate of Goods and Services Tax (GST) cases related to ITC fraud in FY24.

The Directorate General of GST Intelligence (DGGI) has managed to recover over 12 percent of the dues, compared to the 2-3 percent recovery rate in previous years.