In a letter to the PM and Finance Minister Arun Jaitley, Rao said thousands of workers in the state depend on the beedi industry and imposition of excess taxes would adversely effect the workers.
"Over 2,000 granite processing units in the state are providing direct and indirect employments to around seven lakh people," the CM said in the letter.
Imposing 28 per cent on finished products of granites as proposed by the GST council will eventually lead to shutting down of the units in the industry, he added.
GST rates on irrigation and drinking water will increase the cost of several state projects, including Mission Bhagiratha, substantially, he said.
"Considering the welfare nature of projects, it would be appropriate to bring them under exempted category or at least put them in the lower GST slab of 5 per cent," Rao said in the letter.