GST AND UPI AWARENESS CAMPAIGN IN BENGALURU
Background and Purpose of the Campaign
The Karnataka Commercial Taxes Department launched a statewide awareness initiative titled ‘Know GST’ in response to widespread anxiety among small and unregistered traders in Bengaluru due to GST notices linked to Unified Payments Interface (UPI) transactions.
The campaign aims to clarify GST registration requirements and rules, particularly addressing confusion and panic caused by retrospective tax notices based on UPI data showing payments beyond prescribed thresholds.
Key Issues Addressed
Many small traders faced demands for back taxes after their UPI transactions were analyzed, resulting in notices for tax arrears dating back several years.
Traders were unclear about GST registration thresholds, which require registration if annual turnover exceeds ₹40 lakh for goods or ₹20 lakh for services.
Panic arising from notices caused a significant decline in digital transactions, with some vendors refusing UPI payments and reverting to cash.
The campaign educates on legal GST provisions, thresholds, and the distinction between business and personal transactions in digital payments.
Campaign Activities and Outreach
The first workshop was conducted in Koramangala, Bengaluru, where tax officials explained GST norms and thresholds in simple terms.
The Commercial Taxes Department is organizing similar workshops and outreach programs across Bengaluru and the state to ensure wider understanding.
Stakeholders seek to rebuild trust and encourage traders to adopt digital transactions while complying with tax obligations.
The government also discusses relief measures such as amnesty from penalties for compliant vendors to mitigate stress and non-compliance risks.
Impact and Importance
This GST and UPI awareness campaign is critical in:
Restoring confidence in digital payments among small traders.
Ensuring correct GST compliance with proper registration and reporting.
Supporting India’s broader digital economy and financial inclusion goals.
Reducing misinformation and panic caused by surface-level interpretations of UPI data as turnover.
FREQUENTLY ASKED QUESTIONS (FAQ)
Q1: Why was the ‘Know GST’ campaign launched in Bengaluru?
To address confusion and panic among small traders arising from GST notices linked to UPI transactions and to educate them about GST rules.
Q2: What GST registration thresholds must traders be aware of?
Traders selling goods need to register if their annual turnover exceeds ₹40 lakh, and for services, the threshold is ₹20 lakh.
Q3: How did UPI transactions cause GST-related issues?
The tax department used UPI payment data to identify traders surpassing GST thresholds, issuing notices that led to concern over retrospective tax demands.
Q4: What effect did the notices have on digital payments?
Many traders stopped accepting UPI payments, preferring cash to avoid scrutiny and potential tax liabilities, causing a dip in digital transactions.
Q5: What does the campaign do to help traders?
It clarifies GST laws, explains compliance requirements, provides relief options, and encourages continued adoption of digital payments.
Q6: Are there any relief measures for traders facing tax notices?
The government is considering amnesty on interest and penalties for compliant small vendors to ease the transition and compliance burden.
Published on: August 6, 2025
Published by: PAVAN
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