Andhra Pradesh wants the centre to reduce tax under GST on tractors, among others.
The Andhra Pradesh government has asked the central government to consider reducing tax on biogas, cashew kernels and textile, among others, under the new Goods and Services Tax, state Finance Minister Yanamala Ramakrishnudu has said.
In a letter to union Finance Minister Arun Jaitley, Mr Ramakrishnudu said, "As per the rates finalised at the GST Council meeting on May 18 and 19, the tax burden on some of the goods and services is high as compared to the present tax regime."
"The guiding principle in fixing the GST rates is that it should not exceed the combined rate of VAT+ Central Excise/service tax lest it would trigger inflation and hardship to the consumers," Mr Ramakrishnudu said in the letter.
"The AP government has received several representations from trade and industry pointing out the higher tax burden in these categories of goods and services. They have requested for tempering the burden by appropriately reducing the GST rates on them," he said.
Mr Ramakrishnudu requested that the issue be placed before the GST Council at its meeting tomorrow. He said biogas was renewable energy and consumed in rural areas. "The higher tax burden of 12 per cent will discourage biogas production and consumption. Since tax on LPG is only five per cent, it should logically be the same on biogas as well," he said.
Enhancement of tax from 5 to 12 per cent on fertilisers would increase the cost of farming, directly affecting the income of farmers, Mr Ramakrishnudu said. Similarly, 12 per cent GST on tractors will affect farmers, he added.
The 7 per cent tax hike on incense sticks will hurt Andhra Pradesh's handicrafts sector that employed 25 lakh people, he said, adding since regional cinema has a smaller market and cannot compete with Hindi and international cinema, higher tax was unjustified.
"Please consider reducing tax on aforementioned goods and services by placing the issue before the GST Council at its meeting tomorrow," Mr Ramakrishnudu said in the letter.