States have opposed the single GST registration plan, arguing it could dilute their administrative authority.
States fear local tax authorities may lose the ability to directly act against businesses accused of fraud or non-compliance.
Other GST simplification measures, including easier registration, compliance and return filing, are expected to move ahead.
One GST Number For All India? States Say No To Centre’s Big Reform
The Centre’s plan to replace state-wise GST registrations with a single nationwide number has hit a roadblock, with states citing concerns over administrative and enforcement powers
Summary
Advertisement
A proposal to replace state-wise GST registrations with a single nationwide registration has been rejected by states, putting one of the key recommendations of the Rajiv Gauba-led High-Level Committee on Regulatory Reforms on hold, Moneycontrol reported citing government sources.
The proposal was aimed at simplifying GST compliance for businesses operating across multiple states. However, states are concerned that a nationwide registration could reduce their administrative powers, particularly over registration, assessment and enforcement.
“The proposal was made with the objective of simplifying the GST system, but the states are not agreeing to it because they feel it could dilute their administrative authority,” one of the sources said.
Why States Are Opposing The Move
The committee had proposed applying the logic of PAN to GST registration, allowing a business to operate across the country under a single GST number instead of maintaining separate registrations in every state.
For instance, a service provider based in Delhi but operating in Maharashtra currently needs a separate GST registration in Maharashtra. The proposed system would have eliminated this duplication.
Advertisement
States, however, are worried about enforcement. If a company operating under a single national GST registration were to commit fraud in a state where it did not have a separate registration, the local GST commissioner may not have the authority to directly take action against it, an official said.
Under the existing system, states can directly act against businesses that have an office or establishment within their jurisdiction.
GST Simplification Still On Agenda
The rejection of the single-registration proposal does not mean broader GST reforms have been abandoned, another government source said.
Several procedural changes, including simplifying GST registration applications, compliance requirements and return filing, can still be pursued. Much of the digital infrastructure required for these reforms is already in place.
The government is expected to continue working on measures to make GST compliance easier, while the nationwide registration proposal will remain on hold unless the Centre can address the states’ concerns.
Advertisement
The 57th GST Council meeting is scheduled to be held in New Delhi on September 12.