Karnataka: Big relief for small traders as CM Siddaramaiah clarifies GST confusion, waives off old GST arrears

Karnataka Chief Minister Siddaramaiah has assured relief for small traders after a wave of GST notices sparked panic among businesses. Many shop owners were shocked to receive notices demanding lakhs in taxes, mostly linked to UPI-based transactions.

Also read: Karnataka: Other states follow suit as UPI data turns into GST headache for small traders

Clarifying the issue, the Chief Minister said that GST notices were issued only to those whose UPI transactions exceeded ₹40 lakh. He emphasized that there is widespread confusion due to a lack of proper awareness about GST regulations. “Traders dealing in essentials like milk, vegetables, fruits, and meat need not worry. These items are exempt from GST,” he said.

Siddaramaiah also announced that the government will waive off old GST arrears mentioned in the recent notices, but all traders must register for GST going forward. He stressed that abandoning UPI payments would disrupt business and that the state will support traders in complying with tax laws.

In the last 2-3 years, around 18,000 GST notices were issued to 9,000 traders across Karnataka. Many traders reported that even personal and loan-related transactions were being wrongly considered as business income.

To address the issue, Siddaramaiah called for effective awareness programs, a dedicated GST helpline, and direct access to officials—without middlemen. He reaffirmed that the government's intention is not to harass traders but to ensure smooth and transparent tax compliance. Karnataka ranks second in GST collection in India.