Weekly Tax & GST Updates: PAN-Aadhaar Rule, Biometric GST in Assam, AAR Rulings till 1st week Apr 2025
During the 1st week April 2025, a number of significant notifications and circulars were published from diverse areas pertaining to tax and regulatory in India. The updates state that there have been critical changes in procedures regarding filings of income tax, and registrations under GST.
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(I). Income Tax Notifications
1. Mandatory PAN-Aadhaar Linking for Applicants Before 1 October 2024
- New Requirement Added: A new sub-rule, termed “5AA”, has been inserted into Rule 114 of the Income Tax regulations. Under this provision, individuals who obtained their Permanent Account Number (PAN) using their Aadhaar Enrolment ID before 1 October 2024 must inform the Principal Director General of Income Tax (Systems) or a designated officer of their Aadhaar number.
- Compliance Deadline: It is hereby notified that for the PAN holders who registered through Aadhaar before the above-mentioned date, the new cut-off date for linking Aadhaar will be December 31, 2025. Under Section 139AA(2A) of the Income Tax Act, this provision makes it mandatory that the apparent link between both PAN and Aadhaar is established within the said timeframe.
2. Exemption from TDS on NSS Withdrawals
- TDS
Waiver on NSS: Another directive under income tax clarifies that withdrawals from the
National Savings Scheme (NSS) will not attract a tax deduction at source
(TDS) under Section 194EE.
- Context
and Background: This exemption is in line with the earlier provision made by the Finance
Act 2025, which had already exempted withdrawals made on or after 29
August 2024 from NSS under similar conditions.
Refer Notification: 25/2025 Dated 03.04.2025, 26/2025 Dated
03/04/2025 and 27/2025 Dated 04.04.2025
(II). GST Notifications and Advisories
1. Implementation of Biometric Aadhaar Authentication for GST Registration in Assam
- New Biometric Verification Process: A recent amendment to the GST rules introduces biometric Aadhaar authentication for applicants registering in Assam. (Advisory Dated 02/04/2025)
- How It Works: After an applicant submits Form GST REG-01, they will receive an automated email containing either:
- A link for OTP-based Aadhaar authentication, or
- A link to schedule an appointment at a designated GST Suvidha Kendra (GSK) for completing the verification process.
- Effective Date: This process was rolled out in Assam starting from 1 April 2025, aiming to streamline applicant verification by comparing submitted documents with biometric data.
2. Advisory on Case-Insensitive Invoice Reporting for IRN Generation
- Change
in Invoice Handling: The Invoice Reporting Portal (IRP) will now treat invoice or document
numbers as case-insensitive when generating an Invoice Reference Number
(IRN). (Advisory Dated 04/04/2025)
- Details
of the Change: Regardless of whether the reported invoice numbers are in lowercase,
uppercase, or a mix of both, they will be automatically converted to
uppercase during the IRN generation process.
- Effective Date: This change will come into effect from 1 June 2025 and aligns the IRN generation process with the already established practices in GSTR-1 filings.
(III). Authority for Advance Rulings (AAR)
1. Maida Pappad Classification
- Ruling on Maida Pappad: In the case concerning VK Samy Biscuits & Confectioneries, the AAR in Tamil Nadu decided that the product labeled "Maida Pappad"—which consists of uncooked or unfried snack pellets produced through extrusion—should be taxed at a 5% GST rate.
- Effective Date of Ruling: This ruling has been applied retroactively from 27 July 2023 and aligns with the provisions stated in entry S.No. 99B of Schedule I to Notification No. 01/2017 (Rate) dated 28 June 2017. ((AAR Tamil Nadu Ruling dated 20/03/2025)
2. Tapioca Flour Taxation
- Ruling on Tapioca Flour: In a case involving VS Trading Company, the AAR reaffirmed its initial decision regarding the classification of tapioca flour. ((AAR Tamil Nadu Ruling dated 18/03/2025)
- Key Points:
- The company had previously sought a reclassification, claiming that the product should be categorized differently.
- However, AAR rejected the rectification request, stating that the tapioca flour is a by-product of starch production.
- Consequently, it falls under the “Residues and waste from the food industries” category, maintaining the 5% GST rate under the applicable HSN code (230310).
3. Classification of Hitachi Energy’s HVDC Services
- Nature
of the Service: In the case of Hitachi Energy India Limited, the AAR determined that the
services provided—specifically, transportation, freight, and insurance
services linked to the supplied goods—fall under the “Works Contract”
category. (
- Tax Rate Implication: As a result, these services will be subject to GST at an 18% rate.
Conclusion
In summary, the notifications and circulars issued during
the week ending 6 April 2025 introduce important changes and clarifications in
tax compliance, GST registration procedures, and the classification of certain
products and services under GST norms. The updates, which include mandatory
PAN-Aadhaar linking, exemptions from TDS on NSS withdrawals, and several
specific rulings by the AAR, reflect the ongoing efforts of Indian regulatory
authorities to streamline procedures and update classifications in light of
evolving economic and administrative requirements.
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Tax News & Updates