CA Inter Cost & Mgmt

The statement is partially correct and requires careful qualification with reference to the statutory provisions governing Aadhaar authentication for GST registrants.

Examination of the Statement:

The statement cannot be accepted as wholly accurate. While it is true that persons already registered under GST may not require Aadhaar authentication in certain circumstances, the exemption is not absolute and is subject to specific statutory conditions and exceptions.

Legal Framework - Section 25(6A) of CGST Act 2017:

Section 25(6) originally mandated Aadhaar authentication for all applicants seeking GST registration. However, Section 25(6A) introduced exemptions from this requirement. The section provides that Aadhaar authentication shall not be required in the following cases: (i) persons whose Aadhaar number or Aadhaar Enrolment Number is not available; (ii) non-residents; (iii) persons not having Indian citizenship; (iv) bodies corporate, partnership firms, Hindu Undivided Families, trusts, and associations of persons where Aadhaar authentication is provided by the authorized signatory; and (v) such other categories as may be prescribed.

Rule 10B of CGST Rules 2017:

Rule 10B prescribes the procedure and mechanism for Aadhaar authentication. The rule specifies that Aadhaar authentication is mandatory for natural persons seeking GST registration, except where exemptions under Section 25(6A) apply. Importantly, the rule applies to new applicants and those seeking voluntary registration.

Critical Distinction - Existing Registrants:

For persons already registered before the mandatory Aadhaar authentication requirement came into effect, the position is as follows: They are generally not required to undergo fresh Aadhaar authentication merely by virtue of their existing registration status. However, this exemption is conditional and limited in scope. If an existing registrant seeks to:

1. Renew their registration
2. Modify their registration details
3. Carry out transactions that trigger authentication requirements
4. Comply with subsequent statutory compliance measures

they may still be required to provide Aadhaar authentication or link their Aadhaar number as per the prevailing GST provisions and notifications issued from time to time.

Practical Position:

While existing registrants are not mandatorily required to provide Aadhaar authentication for their continued registration, the practical requirement to link Aadhaar has been progressively enforced for compliance purposes, including for filing returns, claiming input tax credit, and undertaking certain transactions.

Conclusion:

The statement is correct in a limited sense — existing GST registrants are not required to undergo fresh Aadhaar authentication merely for maintaining their existing registration. However, it is incorrect if interpreted as an absolute exemption from all Aadhaar-related requirements. The actual legal position is that Aadhaar authentication/linking is mandatory for new applicants under Section 25(6) and Rule 10B, with exemptions for existing registrants that are qualified by subsequent compliance requirements and statutory notifications.

Rimjhim Sales received 100 invoices in January 2022 with a total GST of ₹10 lakh. The eligibility of ITC is contingent upon whether invoice details appear in the recipient's GSTR-2B.

GSTR-2B is an auto-populated form generated by the GST portal from GSTR-1 filings submitted by all registered suppliers. Under Section 16 of CGST Act 2017 and Rule 36(4) of CGST Rules 2017, input tax credit is allowed only on supplies reflected in GSTR-2B. This mechanism ensures alignment between what suppliers report in GSTR-1 and what recipients claim as ITC.

Analysis of invoices:
• 80 invoices with GST ₹6 lakh: These were furnished in suppliers' GSTR-1s filed on the prescribed due date and communicated to Rimjhim Sales through GSTR-2B → ITC Eligible
• 20 invoices with GST ₹4 lakh: These were NOT furnished in GSTR-1 (and therefore do NOT appear in GSTR-2B) → ITC Not Eligible

Although the GST of ₹10 lakh is otherwise eligible for ITC, the binding constraint is that ITC can only be claimed on invoices that have been reported by suppliers in their GSTR-1 and appear in GSTR-2B. Invoices not furnished in GSTR-1 cannot be taken as ITC, even if the recipient has the original invoice document and payment proof.

ITC that can be claimed in GSTR-3B for January 2022: ₹6 lakh

Case (i): Rudra Builders, Rohini, Delhi

Rudra Builders is engaged in intra-State taxable supply of building bricks (goods) with aggregate turnover of ₹23 lakh in the current financial year.

As per Section 22 of the CGST Act, 2017, a person whose aggregate turnover exceeds the registration threshold is liable to register. For suppliers engaged exclusively in taxable supply of goods, the registration threshold is ₹50 lakh per financial year. (The general threshold for mixed supplies is ₹40 lakh.)

Since Rudra Builders' aggregate turnover of ₹23 lakh is below the ₹50 lakh threshold, Rudra Builders is NOT liable to register under GST. Registration remains voluntary.

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Case (ii): Heera, Himachal Pradesh

Heera is engaged in taxable supply of footwear with turnover from two locations:
- Himachal Pradesh showroom: ₹32 lakh
- Nagaland showroom: ₹11 lakh
- Aggregate turnover: ₹43 lakh

Under Section 22 of CGST Act and Notification No. 10/2019-Central Tax, the aggregate turnover is calculated on a pan-India basis (all supplies made by the person anywhere in India, regardless of location or inter-State nature).

As per Notification 10/2019-CT, supplies of footwear (a specified good) have a registration threshold of ₹50 lakh per financial year. This is higher than the general threshold of ₹40 lakh.

Since Heera's aggregate turnover of ₹43 lakh is below the ₹50 lakh threshold applicable to footwear, Heera is NOT liable to register under GST. Registration is optional.