GST: Thousands of MSME Businesses receive notices in Karnataka

The GST department has recently sent notices to thousands of small businesses, primarily under state governments. The main reason for these notices is that these traders have exceeded their annual turnover limits but haven’t registered under GST. The Karnataka GST department alone has sent notices to around 13,000 small traders and street vendors who allegedly earned large sums through UPI without being GST-registered.

Key Points of the Notices:

• GST Registration: Businesses with an annual turnover above ₹40 lakhs are required to register under GST, while service providers have a threshold of ₹20 lakhs.
• UPI Transaction Data: The GST department analyzed transaction data from major apps like PhonePe, Google Pay, Paytm, and BHIM, and matched it with GST registration records.
• Impact on Small Businesses: Many small traders have received tax notices worth lakhs, fearing they might lose their livelihood.

Role of the Commission:

Karnataka’s Commercial Taxes Department Commissioner, Vipul Bansal, clarified that these notices are not final demands. He stated that shopkeepers should submit their transaction details at their local GST office to recalculate the tax, excluding exempted items.