Commercial Tax Revenue Rises 23% in AP’s First Quarter

Andhra Pradesh has posted a strong start to the 2026-27 financial year, with the state's Commercial Taxes Department recording a sharp rise in revenue collections driven by higher compliance, expanding economic activity, and the growing use of artificial intelligence-based tax administration .

The state collected ₹4,829 crore in commercial taxes during June 2026 , marking a 16% increase over the corresponding month last year. The collections were up by ₹664 crore compared to June 2025, bringing the state's monthly tax receipts close to the ₹5,000-crore mark.

According to Commercial Taxes Commissioner A. Babu , the growth was led by a robust performance in Net GST collections , which rose by 21% year-on-year to ₹3,144 crore . The increase translated into an additional ₹553 crore in GST revenue compared to the same month last year. He attributed the gains to continuous monitoring, stricter enforcement measures, and improved taxpayer compliance.

The momentum was reflected in the state's first-quarter performance as well. During the April-June period of FY27, Andhra Pradesh generated ₹15,323 crore in commercial tax revenue, registering a substantial 23% growth over the ₹12,480 crore collected during the corresponding quarter of the previous fiscal year.

Officials said Net GST revenues remained the biggest contributor to the state's tax growth. Quarterly GST collections climbed by 25% , touching nearly ₹10,000 crore , compared with around ₹8,000 crore a year earlier. Revenue from VAT on petroleum products also recorded a healthy 21.2% increase , providing an additional boost to the state's finances.

A key factor behind the surge has been the department's push toward technology-driven tax governance . Over the past year, authorities introduced AI-powered data analytics , automated tax scrutiny systems, and AI-based IGST reversal mechanisms to identify leakages and improve compliance. The department also deployed UPI-based analytics enforcement , linked registration verification with power distribution companies, and expanded the reach of Profession Tax compliance through Aadhaar-based processes .

Another standout achievement was the state's IGST settlement , which reached ₹1,898 crore in June 2026. The figure was ₹533 crore higher than the previous year and represented the highest monthly increase in IGST settlement revenue recorded by the state. The rise is seen as an indicator of stronger interstate trade activity and improved tax reconciliation.

The latest numbers build on the department's 6% cumulative growth achieved in FY 2025-26 , suggesting that Andhra Pradesh's revenue gains are becoming increasingly structural rather than cyclical. Officials believe that a combination of digital payments , predictive analytics , performance dashboards , and inter-departmental data sharing has significantly improved the efficiency and accuracy of tax administration.

With the state pursuing ambitious infrastructure and industrial development plans, the sustained growth in tax revenues is expected to strengthen its fiscal position and provide greater resources for future development initiatives. Commissioner A. Babu expressed confidence that Andhra Pradesh's modern tax administration model can emerge as a benchmark for other states while supporting long-term economic growth.