The recent overhaul of the Goods and Services Tax (GST) regime, approved by the GST Council on Wednesday, has sparked varied responses in Andhra Pradesh. The reforms, which slash taxes on everyday items like hair oil, cornflakes, and health insurance policies, are seen as a boon for the poor but have raised concerns about state revenue losses.

CPI(M) Andhra Pradesh secretary V. Srinivas Rao welcomed the GST reforms for their potential to lower prices and benefit ordinary citizens. However, he criticised the TDP-led NDA state government for failing to demand compensation from the Centre to address the resulting revenue shortfall. "These reforms are largely positive, as they reduce prices for the common man, but they create a significant income gap for the state. Unlike southern states like Tamil Nadu, Kerala, Karnataka, and Telangana, the N. Chandrababu Naidu-led government did not seek compensation," Rao told PTI Videos.

Rao questioned how Chief Minister Naidu would bridge the revenue gap, warning that without Central compensation, the state might resort to indirect taxes, burdening citizens. "We will not tolerate additional taxes on the people to fill this gap. The Andhra government must align with neighbouring states to demand compensation to fund development projects," he emphasised.

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Andhra Pradesh Congress Committee (APCC) vice president Kolanukonda Sivaji attributed the reforms to pressure from Congress leader Rahul Gandhi’s relentless campaigns and external factors like US President Donald Trump’s tariff policies. He dismissed the Centre’s "Diwali bonanza" label as a political ploy by the Narendra Modi-led NDA government to gain electoral advantage ahead of the Delhi and Bihar state elections. "This is a drama by the BJP to counter vote theft controversies and capitalise on the budget announcement," Sivaji told PTI.

Sivaji demanded compensation for states facing revenue losses, cancellation of alleged "GST harassment" cases, inclusion of petrol and diesel under GST, and a reduction of the GST rate on cement and steel to 5%. He argued that the reforms offer no relief to MSMEs and fail to address high taxes on agriculture. "The credit for these changes belongs to the INDIA Alliance and Rahul Gandhi," he added.

In contrast, Andhra Pradesh BJP chief spokesperson V. Jaya Prakash praised the reforms as a step toward simplifying GST and supporting the poor, farmers, and middle class. "Prime Minister Modi prioritises the welfare of the underprivileged. These tax reductions will directly benefit families," he said.

The GST reforms, effective from September 22, 2025, aim to simplify the tax structure and reduce prices on essential goods. However, the lack of compensation demands from Andhra Pradesh, a key NDA ally, has fuelled debates about the state’s fiscal strategy and its alignment with the Centre’s policies.

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