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The Goods and Services Tax (GST) council is heading towards the finalization of the revised GST laws in its 11th meeting on March 4 and 5, 2017 and is also likely to retain the clause on services sector, whereby service providers companies will be required to register in every state where they operate.
At present, service providing companies are benefitted from a single centralized registration system for paying service tax. However, under GST regime, since state will also get the power to collect taxes on service, service related companies will have to register in every states where they have presence.
Though the service companies had highlighted procedural hassle of such a move, yet states, more concerned about their revenue, are not willing to agree to a centralized registration.
Service providers in the banking, insurance, logistics, IT-enabled services and aviation sectors are currently operating under a single centralized registration of service tax which means that they have to file only 3 service tax returns in one year. But in GST era, they will be filing 61 returns per state per year, after taking registration in the states of their operation.
The Indian revenue services officers had written a letter to the prime minister highlighting the negative impact of the clause on the ease of doing business for service providing companies and hoping for some relief in the provision.