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Cabinet officials

Telangana Advocates for Balanced GST Reforms to Protect State Revenues

Strategic Insights

— 1 min read

Telangana has shown strong support for the proposed Goods and Services Tax (GST) rate rationalisation, emphasizing the need for a balanced approach that reduces the tax burden on citizens while safeguarding state revenues. Represented by Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka, the state highlighted the importance of financial stability and the need for a robust compensation mechanism to ensure the success of welfare schemes and critical infrastructure projects.

Key Takeaways:

  • Telangana supports GST rate rationalisation but emphasizes the need to balance it with state revenue protection.
  • The state proposes continuing the existing compensation cess or increasing GST rates on sin or luxury goods to distribute revenue to states.
  • Telangana suggested continuing the existing compensation cess, with the collected amount fully allocated to respective states.
  • If the cess is discontinued, GST rates on sin or luxury goods could be increased to their current levels, with the additional revenue distributed to states.
  • The state wants a policy to ensure GST exemptions benefit the public, not just insurance companies.
  • Telangana advocates for increased state representation in the Group of Ministers (GoM) to reflect diverse perspectives.
  • The state highlights disparities in revenue devolution and seeks more equitable GST reforms.
  • Telangana wants to safeguard state revenues and ensure ongoing support for citizens while contributing to national economic objectives.

Statistics:

  • Current state revenue growth lingers at 8-9%, falling short of the promised 14% annual revenue growth.
  • Telangana provides insurance to 95 lakh families.
  • Proposed GST exemption on Insurance aims to benefit the public, not just boost insurance companies' profits.

Sources:

  • "Seeks safeguards for state revenues HYDERABAD: Telangana has expressed strong support for the proposed Goods and Services Tax (GST) rate rationalisation..." - Indian National Press.
  • "Telangana advocates for GST Exemption on Insurance with safeguards A day earlier, Bhatti Vikramarka Mallu attended the Group of Ministers (GoM) meeting in New Delhi to discuss GST exemptions on life and health insurance." - Indian National Press.
  • "Copyright 2025 Indian National Press (Bombay) Pvt. Ltd., distributed by Contify.com"

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