Delhi High Court Orders Biometric Aadhaar Verification For GST

The Delhi High Court has ordered Goods and Services Tax (GST) authorities across the country to ensure that no fresh GST registration is granted unless the applicant undergoes biometric-based Aadhaar authentication.

This decision was made by a division bench of Justices Anil Khetarpal and Shail Jain, who passed the order amid concerns over fraudulent GST registrations obtained by misusing Permanent Account Number (PAN) and Aadhaar details of unsuspecting individuals.

According to data furnished by the Union Minister of State for Finance in the Rajya Sabha, 2,800 fraudulent GST registrations using stolen or frozen PAN and Aadhaar details were detected in 2023-24, involving tax evasion of Rs 15,085 crore. In 2024-25, authorities detected 1,654 such registrations involving tax evasion of Rs 13,109 crore.

The court noted that the Government had stated that biometric Aadhaar authentication was mandatory for GST registration. However, it observed that more than a year later, the measure had apparently not been implemented fully.

The court questioned the delay in implementation, stating that despite the passage of more than one year, the statement given by the minister on the floor of the house had not been fully implemented. The court also recorded that counsel appearing for the authorities had been unable to identify any practical difficulty in making biometric Aadhaar authentication compulsory for GST registration.

The court consequently directed authorities across the country not to allow any GST Registration without biometric-based Aadhaar authentication henceforth. While issuing the direction, the bench permitted the authorities to bring to its notice any practical difficulties that may arise while implementing the requirement.

The court also asked the authorities to consider a set of measures suggested by Senior Advocate Tarun Gulati to prevent the misuse of PAN and Aadhaar details for securing fraudulent GST registrations. The matter will next be heard on September 22, 2026.

This decision is significant as it seeks to close a loophole that has allegedly enabled large-scale tax evasion using stolen identities. The use of biometric Aadhaar authentication is expected to prevent fraudulent GST registrations and reduce tax evasion.

The GST authorities will need to implement this new requirement, which may require significant changes to their current registration process. The court's decision is a step towards preventing tax evasion and ensuring that GST registrations are genuine.

In conclusion, the Delhi High Court's order is a significant step towards preventing fraudulent GST registrations and reducing tax evasion. The use of biometric Aadhaar authentication will provide an additional layer of security and help to prevent the misuse of PAN and Aadhaar details.

The impact of this decision will be felt across the country, as GST authorities will need to implement the new requirement. The court's decision is a positive step towards preventing tax evasion and ensuring that GST registrations are genuine.