Telangana CM favours AI-driven plan to boost GST revenue, checks leakages

Hyderabad: Chief Minister A. Revanth Reddy has called for a comprehensive action plan to use Artificial Intelligence (AI) to enhance the state's Goods and Services Tax (GST) revenue. The initiative is expected to simplify the tax system and support the state's economic growth, officials said on Friday.

During a meeting with noted economist and former Chief Economic Advisor Arvind Subramanian, the Chief Minister discussed strategies to increase revenues in the backdrop of rapid economic expansion. The discussions centred on reforms in the Commercial Taxes department, particularly in Excise and GST administration.

Mr. Subramanian highlighted technological tools that could help augment revenue while also promoting Ease of Doing Business (EoDB). He recommended that the state focus on curbing revenue leakages in the construction and building equipment sectors. This would require better coordination among the Municipal Administration, Panchayat Raj, Energy, Commercial Taxes departments, and the Telangana State Real Estate Regulatory Authority (RERA).

The former economic advisor proposed that tax estimates for high-rise constructions and contract works be recorded at the time of receiving permission applications. This, he noted, would ensure that tax dues are assessed accurately and prevent evasion. The Chief Minister asked officials to examine the feasibility of integrating Mee Seva, Aarogyasri, and the Chief Minister's Relief Fund to improve administrative efficiency.

The state government is expected to unveil a formal AI-based programme soon. Officials were directed to ensure that the transition does not adversely affect businesses. The initiative is part of a broader effort to modernise tax administration and increase revenue without imposing additional burdens on taxpayers.

Telangana has consistently recorded high economic growth, and the government sees AI as a tool to sustain this momentum. By leveraging data analytics and automation, the state aims to identify tax evasion patterns and improve compliance. The move aligns with national efforts to integrate technology into tax systems for better transparency and efficiency.

Industry experts have welcomed the proposal, but also cautioned that the implementation must be inclusive and transparent. They said that small businesses, in particular, should be given adequate time and support to adapt to any new system.

The meeting comes at a time when state governments across India are exploring ways to strengthen their finances. GST collections have been a key source of revenue, and technological interventions are seen as crucial for optimising them.

Further details on the AI programme and its rollout are expected in the coming weeks. The state government has assured stakeholders that their concerns will be taken into account before any major changes are introduced.