I am not getting proper documentation for Notification Service Extension's provisioning profile. But as per my knowledge, the Notification Service Extension has it's own bundle id, it must be set up with it's own App ID and provisioning profile.
Please clear this doubt that do i need to use distribution provisioning profile for notification service extension or not?
A profile is needed - I think the question is if it is required to be wildcard or explicit.
From the docs:
Configuring Push Notifications
Apple Push Notification service (APNs) allows an app that isn’t running in the foreground to notify the user that it has information for the user. Use Xcode to enable push notifications. If necessary, Xcode creates an explicit App ID with the APNs entitlement enabled and a team provisioning profile using the explicit App ID. You then generate and download a corresponding client SSL certificate—this step fully enables push notifications—and later, install the client SSL certificate and key on your server.