Karnataka launches ‘Know GST’ drive to calm UPI-linked tax panic among traders: Report

The first workshop under the initiative was held on Monday in Koramangala, Bengaluru, by the Commercial Taxes Department.

With anxiety spreading among small and unregistered traders over tax notices linked to UPI payments, the Karnataka government has launched a statewide awareness initiative titled ‘Know GST’.

The campaign aims to clarify Goods & Services Tax (GST) norms and ease fears. (Shutterstock)

The campaign aims to clarify Goods & Services Tax (GST) norms and ease fears that have led to a noticeable drop in digital transactions across the state.

The first workshop under the initiative was held on Monday in Koramangala, Bengaluru, by the Commercial Taxes Department. Officials explained GST rules and thresholds, seeking to reassure traders who have recently come under scrutiny, the Times of India reported.

Under GST law, traders must register if their annual turnover exceeds ₹40 lakh for goods or ₹20 lakh for services. However, earlier this month, the department used UPI transaction data to track around 14,000 unregistered traders, many of whom had reportedly accepted payments beyond these limits.

The department then issued notices to these traders, in some cases demanding tax arrears dating back to 2021-22, with amounts going up to ₹40 lakh. The sudden enforcement action sparked widespread panic.

Many traders immediately stopped accepting QR code-based payments and reverted to cash-only transactions, impacting the broader digital payments ecosystem in the city.

In response, unregistered traders have formed a new forum under the Karnataka Karmika Parishat (KKP) and announced a two-day strike on July 23 and 24, followed by a statewide shop shutdown on July 25. They have also threatened to halt the sale of essential goods like milk, if their concerns remain unaddressed.

Chief Minister Siddaramaiah, who also holds the finance portfolio, has stepped in to defuse the situation. He has assured protesting traders that the matter will be raised at the upcoming GST Council meeting. He has also directed the Commercial Taxes Department to engage with traders and resolve their concerns, leading to the rollout of the Know GST campaign.

Among other leader, BJP MLA S Suresh Kumar has weighed in on the issue, pledging to take it up with Chief Minister Siddaramaiah. He emphasized the need to safeguard the interests of small-scale entrepreneurs amid the ongoing concerns.

(With agency inputs)