The Andhra Pradesh government had joined the other states in opposing the Central government’s move to include petrol and diesel in the GST net. The State government had already written to the Central government and the GST Council that it was not ready to accept the proposal as the States would lose their income.
After the introduction of the GST, petrol and diesel are the only products where the States can have their own tax and make some money. Several states have several tax slabs for the diesel and petrol, besides the Central tax. In fact, petrol and diesel have been the best revenue sources for the States, after excise.
Now, they are not prepared to give up their stakes on this by allowing the Central government to have the GST cover on these two products. In Andhra Pradesh, the government would have to forgo Rs 6,000 crore per year if the petrol and diesel are accepted for the GST cover. The government is not ready for the same and had opposed the move.
Minister for Finance, Yanamala Ramakrishnudu, during his short speech in the Assembly while introducing the GST (Amendment) Act 2018, said that the State had already written to the GST Council opposing the move. He had categorically stated that several States have also opposed the move, but regretted that the Central government particularly the BJP leadership is trying to push the issue forward.
The BJP, out of 29 States, is in power in majority states which form part of the GST Council. The AP Finance Minister expressed fear that Prime Minister Narendra Modi, with the support of the majority Chief Ministers, might have his word final but, the opposition would continue. The finance ministers from the southern States, who had two meetings in the past, are not ready to give up their stakes on the petrol and diesel.