Loss of ability to raise quick revenue: Taxes on petroleum are also a lever, which states can use to address any sudden shortfall in revenue. Thus this may get affected once the petroleum products are included in GST.
Loss of revenue: The VAT on petroleum products is the major source of the revenue for the state government. Thus inclusion into GST may affect the revenue of the government to spend on social sector schemes.
Loss of taxes to Centre:States also fears that if GST is imposed on petroleum products then the proceeds of the new tax have to be shared between Centre and states.
