Published Apr 10, 2026 | 9:12 AM ⚊ Updated Apr 10, 2026 | 9:12 AM
A brigde in Hyderabad. (iStock)
Synopsis: The Telangana government’s move to overhaul its revenue architecture through a unified portal is expected to ensure better tax compliance by traders. While the proposals are still under study, they collectively point to a strategy to plug leakages, widen the tax base, and leverage digital trails in an increasingly cashless economy.
The Telangana government’s latest move to overhaul its revenue architecture through the proposed “RevOne” unified portal is expected to improve tax compliance among traders.
Issued through Government Order (GO) Ms No. 81 on 6 April, the order constitutes a high-level committee led by the Chief Secretary to examine structural reforms in revenue mobilisation.
While the proposals are still under study, they collectively point to a strategy to plug leakages, widen the tax base, and leverage digital trails in an increasingly cashless economy.
The proposed RevOne portal is being projected as a real-time, intelligence-driven data-sharing platform. It links multiple revenue-generating departments.
The idea is to break departmental silos and bring commercial taxes, transport, registration, mining, labour, and municipal data into one single interoperable system.
Currently, fragmented databases often allow tax evasion and lead to under-reporting. For instance, discrepancies among GST filings, property registrations, transport permits, and labour records are frequently uncorrelated.
By integrating these datasets through a PAN-linked Application Programming Interface (API) architecture, the government could detect mismatches in declared income and transactions, identify unregistered businesses operating within formal supply chains, track high-value transactions across sectors, and reduce duplication and fraud in registrations and permits.
Such cross-verification mechanisms are proving to be effective in central tax systems. If implemented efficiently, it is hoped that RevOne could significantly enhance compliance without necessarily raising tax rates — thereby improving revenue buoyancy.
The order explicitly refers to “plugging leakages” as its key objective. In practical terms, leakages occur due to underreporting of sales, cash transactions escaping the tax net, weak coordination between departments, and limited audit capacity.
According to sources, by enabling real-time data sharing, RevOne is expected to shift the system from reactive enforcement to proactive detection.
Automated alerts, risk profiling, and AI-driven analytics could flag suspicious patterns early, reducing reliance on manual inspections. This is particularly critical for sectors like construction, mining, and informal retail—areas traditionally prone to revenue loss.
Another significant proposal under examination is the reintroduction of the entertainment tax by local bodies. Following the 101st Constitutional Amendment Act, many indirect taxes, including the entertainment tax, were subsumed under GST. However, local bodies were left with limited fiscal autonomy, relying heavily on state transfers.
The committee that has been constituted has been mandated to explore whether municipalities can levy an entertainment tax within the existing constitutional framework. If implemented, this could provide direct revenue streams to urban local bodies, reduce dependence on state grants, and enable better funding for civic infrastructure. In a rapidly urbanising state like Telangana — where multiplexes, events, and digital entertainment consumption are rising — this could generate steady local revenues.
The most forward-looking proposal is the plan to capture and store transaction-level data of B2C sales conducted through POS machines, UPI, and other digital channels.
With India witnessing a surge in digital payments, especially via UPI, a vast amount of economic activity is already recorded electronically. However, this data is not fully leveraged for tax intelligence at the state level.
Implementation, however, will hinge on inter-departmental cooperation, standardisation of legacy databases, capacity building in data analytics, and efficient vendor selection for technology deployment. Past attempts at integration in various states have often stumbled due to bureaucratic resistance and technical incompatibilities. Telangana’s strong IT ecosystem may offer an advantage, but execution risks remain.
The committee has been tasked with submitting a preliminary report within 30 days and a final report within 60 days. If the recommendations are accepted and implemented in phases, Telangana could emerge as a model for data-driven revenue governance.
Rather than increasing tax rates, the focus is on improving efficiency and coverage. Improving efficiency in tax collection is what the government frequently takes recourse to, as it cannot impose fresh taxes on the people without running the risk of political backlash. Now the idea is to collect as much tax as possible without hurting the taxpayer too much.
(Edited by Muhammed Fazil.)
