Bringing petroleum under GST will require bringing states on board, a finance ministry source said, noting that fuel taxation is one of the few areas where states retain fiscal flexibility.

“It will require a bit of an effort to bring them on board,” sources said, adding that going ahead if tax becomes more “robust” and if the effects of geopolitical uncertainty ease, that could help. “Maybe at that point acceptance will be higher.”

On future rates changes, sources at the Finance Ministry said that “Rationally speaking, there is nothing to be done on it,”, noting that current proposals are essentially about “concessions”, which risk creating inverted duty structures. “Concessions in GST regime is a double-edged sword. If you give concession to the final product, you are essentially creating an inverted structure,” sources said.

Meanwhile, the Centre sees little room for rate changes and is working to widen the tax base beyond the existing 1.6 crore.

The Council has also decided to replace ad hoc officers’ panels with a single 12-member standing committee. States are grouped by “GST footprint”, an index combining GST revenue and taxpayer numbers. The panel will have five large states, three medium and four small ones. Sources confirmed that Maharashtra, Uttar Pradesh, Karnataka, Tamil Nadu and Gujarat are the five large states which will stay permanently, while others rotate every two years.