Opposition States Raise Revenue Loss Concerns Ahead Of GST Council Meeting; Andhra Pradesh Backs Centre’s Proposal

Ministers from eight opposition-ruled states, including Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana, and West Bengal, met before the 56th GST Council session to coordinate their stance on the Centre’s proposal to rationalise GST rates.

While supporting the move to restructure tax slabs, these states voiced concerns about losing significant revenue unless a clear compensation mechanism is provided. Jharkhand’s Finance Minister stated that his state alone could face losses of around ₹2,000 crore annually. Opposition states projected combined losses ranging from ₹85,000 crore to ₹2 lakh crore each year and sought guaranteed compensation of at least 14% revenue growth for five years.

Meanwhile, Andhra Pradesh, an NDA ally, extended complete support to the Centre’s plan. The Union government’s proposal aims to simplify GST by moving to two main tax slabs of 5% and 18%, along with a 40% rate for sin and demerit goods.

While Prime Minister Narendra Modi promised the reform would reduce the tax burden on citizens and small businesses, several states questioned whether the benefits would genuinely reach the public or primarily boost profits for select companies.