States Push Back on Nationwide GST Registration

The high‑level committee chaired by Revenue Secretary Rajiv Gauba had suggested that businesses should be able to register for the Goods and Services Tax (GST) just once – much like a PAN – instead of obtaining separate registrations for every state they operate in. It sounded neat on paper, a tidy way to cut duplication for firms that, say, have a warehouse in Delhi and a showroom in Maharashtra.

But the idea ran straight into a wall of resistance from the states. According to three senior government sources, the states refused to endorse the single‑nationwide registration, arguing that it would strip them of crucial administrative powers. "They worry about losing the ability to register, assess and enforce against businesses in their own jurisdiction," one source told Moneycontrol.

At present, if a company runs a shop in Karnataka but its head office is in Gujarat, it must obtain a separate Karnataka GST number. That means filing separate returns, maintaining parallel records and, frankly, a lot of paperwork. The Gauba panel’s logic was to let the same GSTIN serve the whole country, mirroring how PAN works for income‑tax purposes.

The states, however, see a more concrete risk. Imagine a firm operating under a single national GSTIN commits fraud in Tamil Nadu. Under the current system, the Tamil Nadu commissioner could directly issue notices, levy penalties or even initiate prosecution because the company holds a Tamil Nadu registration. With only one national number, the state’s hand would be forced – it might have to go through the central authority, diluting the immediacy and effectiveness of enforcement. "That is one of the key concerns because the states do not want to give up their powers to act against businesses operating within their jurisdiction," a second source explained.

Because GST functions on a centre‑state consensus model, any sweeping change needs every player on board. The disagreement means the proposal will not be on the agenda of the 57th GST Council meeting slated for September 12 in New Delhi.

That said, the setback does not signal a full retreat from simplifying GST. A third source clarified that while the single‑registration idea is on hold, other reforms – such as streamlining the registration application, easing compliance for small taxpayers and improving return filing processes – are still in the pipeline. "We cannot keep reducing the tax base or raising thresholds simply in the name of simplification," the source added, noting that the government now wants to broaden the tax base while keeping rates reasonable, especially after the fiscal space was squeezed by the GST 2.0 rate rationalisation.

In practical terms, the digital backbone for many of these measures is already in place, so the centre can push ahead with tweaks that do not touch the core issue of state authority. Reviving the single GSTIN concept, however, will likely require the centre to first address the states’ enforcement worries and perhaps devise a shared mechanism that lets a state intervene directly even when a business holds a national number.

For now, businesses will continue to juggle multiple GST registrations, and the debate over a unified GST identity remains unresolved. The upcoming council meeting will probably focus on other, less contentious, simplification steps while the single‑registration dream stays shelved for the moment.