India doubles down on biometrics to prevent tax fraud, Aadhaar authentication use cases expand

India’s Central Board of Indirect Taxes and Customs (CBIC) is set to implement biometric authentication to help curb “rampant” Goods and Services Tax (GST) fraud.

India’s GST is broadly comparable to VAT tax on goods sold in the West, though many products such as alcohol and electricity, are instead covered in separate state protocols.

According to reporting by LiveMint, biometric authentication of authorized representatives or directors may now be required when new or existing firms are looking to register with the C.

However, this step will only be required if government tax officers suspect fake entities are being set up to fraudulently claim ITC, a type of tax credit issued to GST payers.

Most of the fake entities in question are reportedly operating in sectors like metal, plastic scrap, or waste paper, as per LiveMint.

The tax organization is already trialing biometric authentication as well as geo-tagging in some states, and the project is set to be implemented India-wide after the results of the project can be evaluated.

Expanding use cases

The news comes as India is also looking to expand the scope of Aadhaar’s use cases to other administrative areas.

As per reports from The Hindu, the Office of Registrar General of India (RGI) will now be able to perform Aadhaar authentication during the registration of births and deaths in the country.

However, the use of Aadhaar for these types of registrations is purely optional.

More implementations of Aadhaar could soon be appearing in this same vein; India’s Central government is now accepting applications from Ministry or State governments who would like to use Aadhaar authentication for their own purposes.

These organizations will need to justify their use of the Aadhaar system before submitting their application to the Central Government of India.

More generally, Aadhaar use in India would seem to ramping up according to many metrics.

The number of transactions using India’s Aadhaar digital identity scheme reportedly shot up 38 per cent in the period between January 2023 and May 2023.

Almost 10.6 million face-based transactions based on Aadhaar have now been performed since its launch, as per reporting by English anguage Indian publication Firstpost, and the numbers using the system are said to be slowly increasing.

Use cases for these types of face-authenticated transactions include both accessing government schemes and benefits, as well as verifying payments that rely on Aadaar.

Article Topics

Aadhaar  |  biometric authentication  |  biometrics  |  birth registration  |  digital identity  |  face biometrics  |  fraud prevention  |  India