Hyderabad: Fuel sales and GST collections drove a robust rise in Telangana’s revenues in 2025-26, with commercial taxes once again emerging as the backbone of the state’s finances across all districts. The state earned about ₹78,655 crore from commercial taxes during the fiscal, up from ₹75,149 crore in 2024-25 — marking an increase of nearly ₹4,000 crore. Officials attributed this steady growth to consistent economic activity and strong consumption patterns rather than any one-off factor. A major share of this revenue came from GST, which alone contributed over ₹43,000 crore. In addition, VAT on petrol and diesel brought in more than ₹32,000 crore, reinforcing fuel sales as one of the most dependable sources of income for the govt. The sustained demand from freight transport, public transport systems, and private vehicle users ensured that fuel remained a key revenue driver throughout the year. In March 2025-26, Telangana’s GST revenue rose to ₹4,020 crore, registering a 9% increase from ₹3,685 crore recorded in March of the previous financial year. The importance of fuel taxes also figured prominently in discussions in the state assembly. The Congress govt maintained that reducing VAT on fuel was not feasible, particularly after the Centre lowered excise duty, which already impacted overall tax dynamics. Telangana continues to have among the highest VAT rates in the country, with about 35% on petrol and 29% on diesel — a factor that significantly boosts the state’s revenue. Improved monitoringOfficials emphasised that the rise in commercial tax collections reflects everyday economic transactions — trucks refuelling on highways, buses operating across districts, businesses filing GST returns, and petrol pumps recording steady sales. Improved monitoring and enforcement by the commercial taxes department also played a role in enhancing compliance and collections. The final tally for the fiscal year could see a slight uptick, as revenue from March 31 — the last day of the financial year — is yet to be fully consolidated. Overall, the numbers point to a stable and growing revenue base, anchored by fuel consumption and GST inflows, officials added.
