Bengaluru (Karnataka Information Department):
The Commercial Taxes Department has issued an official clarification following media reports across television and print highlighting concerns over GST notices sent to small traders in Karnataka.
According to the department, the Goods and Services Tax (GST) Act, which came into effect across India on July 1, 2017, mandates compulsory registration for suppliers of goods whose aggregate annual turnover exceeds ₹40 lakh, and for suppliers of services with turnover exceeding ₹20 lakh in a financial year, as per Section 22 of the Act.
The clarification further notes that aggregate turnover includes both taxable and exempt supplies of goods and services. However, tax liability applies only to taxable supplies. For instance, bread is exempt from GST, while snack items attract 5% GST, the department clarified.
ಪತ್ರಿಕಾ-ಪ್ರಕಟಣೆ_250711_210244Between FY 2021–22 and FY 2024–25, the department obtained transaction data from UPI payment service providers, which revealed that many traders had received funds exceeding ₹40 lakh solely via digital payment methods. Since most traders also accept cash and other forms of payment, their actual annual turnover is likely even higher.
Based on this data, the department has issued notices to traders who have not registered under GST despite exceeding the threshold, directing them to furnish details of goods and services sold and pay any applicable tax.
The statement urges such traders to immediately register under GST. Those with turnover below ₹1.5 crore annually can opt for the Composition Scheme, under which they can pay a nominal 1% tax instead of the regular GST rate.
The department has advised all stakeholders to access further information and resources via its official website: https://gst.kar.nic.in.
