Hyderabad: GST slab changes introduced by the Centre led to a sharp fall in Telangana’s tax receipts, with officials estimating a revenue loss of nearly ₹1,000 crore in November alone.
Officials said GST slab changes reduced the share of tax revenue flowing to Telangana. As a result, monthly collections weakened. Consequently, the state’s fiscal space narrowed, according to officials handling revenue matters.
Earlier, the GST structure had four tax slabs. However, the Centre later compressed the framework and retained only three. At present, the 5 per cent and 18 per cent slabs account for most collections. The Centre removed the earlier 12 per cent and 28 per cent slabs, while keeping a 40 per cent rate only for select luxury goods.
GST slab changes impact Telangana revenue trends
In addition, the Centre reduced GST rates on insurance, medical services, and several other sectors. These cuts lowered prices for consumers. The Centre stated that crores of people benefited from the revised tax structure.
However, state officials said GST slab changes sharply weakened revenues. Telangana’s November figures highlighted this impact. Compared with November 2023, the state recorded an increase of ₹1,490 crore in sales tax revenue in November 2024.
In contrast, November 2025 showed growth of only ₹431 crore over the previous year. Therefore, Telangana effectively lost nearly ₹1,000 crore on a year-on-year basis, officials said.
GST slab changes raise concerns over state finances
During earlier GST Council discussions, states had strongly opposed the slab changes. They warned that rate reductions without alternative revenue streams would affect welfare schemes and development works. Moreover, states cautioned that their finances would come under severe strain.
Despite these objections, the Centre assured states that it would review the impact after implementation. Officials in Telangana expressed dissatisfaction with that assurance.
The state had earlier projected annual losses exceeding ₹7,000 crore due to GST slab changes. After examining the November data, officials said the loss could cross those estimates. They warned that a ₹1,000 crore drop in a single month could strain future finances.
Overall, criticism has grown that GST slab changes delivered political gains to the Centre, while states continued to shoulder the financial burden. Telangana and several other states are now awaiting clarity from the Government of India on compensation or alternative revenue measures.