In a significant move aimed at curbing fake GST registrations and large-scale tax evasion, the Delhi High Court has directed GST authorities across the country not to grant any new GST registration without biometric-based Aadhaar authentication.
A Division Bench of Justice Anil Kshetarpal and Justice Shalinder Kaur issued the interim direction on 8 September 2026 while hearing petitions concerning fraudulent GST registrations allegedly obtained by misusing the PAN and Aadhaar details of unsuspecting individuals.
The Court observed that although biometric-based Aadhaar authentication had been introduced as an anti-fraud measure, it was presently being applied primarily to applicants identified as “risky” through system-based parameters and data analytics. The High Court has, for the time being, directed that biometric authentication be carried out for every GST registration applicant and not merely risk-flagged cases.
The Court took note of data placed before Parliament showing the scale of fake registrations. As recorded in the order, 2,800 fraudulent GST registrations involving approximately ₹15,085 crore of tax evasion were detected during FY 2023-24, while 1,654 such registrations involving about ₹13,109 crore were detected during FY 2024-25.
The proceedings arose, among other matters, from the petition of a woman who alleged that two GST registrations had been fraudulently obtained using her PAN and Aadhaar details without her knowledge, ultimately exposing her to proceedings involving more than ₹4.46 crore.
Expressing concern over the continuing misuse of stolen or frozen PAN and Aadhaar credentials, the High Court observed that fake GST registrations not only cause loss of government revenue but also expose innocent citizens to harassment and tax proceedings.
The Court has, however, allowed the government to bring before it any practical difficulties in implementing mandatory biometric Aadhaar authentication nationwide.
Key Takeaway
The direction has potentially major implications for all fresh GST registration applications across India. If implemented as directed, biometric Aadhaar authentication would no longer be confined to applicants identified by the GST system as risky; every new GST registration would require biometric-based Aadhaar verification. CA Sansaar