he government is considering a nationwide single GST registration process for the aviation, banking and insurance sectors, people in the know of the matter said. A single registration will potentially solve a majority of the compliance problems that services companies have been complaining about. They now have to register themselves and file GST returns in every state or union territory (UT) they operate in.
But the change will require the approval of the GST Council, the top decision-making body under the new tax system, where states are expected to oppose it fearing revenue loss as they have done when the proposal had come up before, tax experts said. While goods-producing industries were used to making multiple state-wise returns for value-added tax under the previous regime, this is a new requirement for services companies, which complain it as a cumbersome process involving lot of paperwork and manpower.
There could be problems also over tax assessment due to reassignment of work within the tax authorities. The government has assigned GST assessing officers from a combined pool of officials who previously dealt with sales tax, excise or VAT. Some of them, especially those working in state governments, may not be familiar with the way services industries operate.
Earlier, state officials dealt primarily with manufacturing companies, collecting VAT. The central government collected excise tax as well as services tax from industries like aviation and financial services. Service providers, which were previously assessed only at the central level, are also assessed by state officials under GST.