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States likely to object to centralised GST registration for bank services: sources

Even though Finance Minister Arun Jaitley has initiated the discussion on centralised GST registration for the services sector, the states are unlikely to accept single registration for banking services, sources have told CNBC-TV18.

The state tax officials said that all the states fear that they may not get a fair share of the service tax, if the taxes are paid from the origin of the service.

The states have asked for GST registration in each and every state and Union Territory, to ensure that not only one state enjoys all the benefits. As most banks' head offices are situated in Mumbai, they feel the service taxes will go into Maharashtra's hands.

Banks for now have single registration, which is at source. While states demand for multiple registrations, bankers feel they will find it difficult to manage registration in multiple states owing to the number of transactions which are made every day.

"Difficulty for us if we don't have centralised registration as we do more than 10 crore transactions per day. So we feel it is a very large issue, we need to make the process simple," said Arundhati Bhattacharya, Chairperson of the State Bank of India.

Another concern for banks is that they may face simultaneous audit from various states.

The central government has sought single registration for services provided by banks, telecom companies and insurance companies. It has assured the states on intra-company services valuation.

Jaitley and Revenue Secretary Hasmukh Adhia will be in Mumbai over the weekend to meet the GST stakeholders.

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