Karnataka Launches ‘Know GST’ Campaign to Address UPI-Linked Tax Concerns Among Traders

An illustration depicting a laptop with 'GST' prominently displayed, accompanied by visuals of a calculator, a cash note, and figures representing traders discussing tax matters.

Summary:

The Karnataka government has launched a state-wide initiative titled ‘Know GST’ to raise awareness among small traders and unregistered businesses about GST requirements. This follows enforcement actions by the Commercial Taxes Department based on UPI transaction data, which identified around 14,000 unregistered traders who exceeded the registration threshold. Some were issued notices demanding tax dues going back to 2021-22, with demands going up to ₹40 lakh.

This created panic among traders, many of whom stopped using UPI/digital payments and reverted to cash-based transactions, fearing tax liabilities.

What is “Know GST” Campaign

The Government of Karnataka’s ‘Know GST’ initiative is a step towards transparency and support. It aims to educate, clarify doubts, and help traders understand who is liable to register under GST and who is not. If your aggregate turnover is within the exemption limit, you are not liable to register or pay GST.

However, if your turnover exceeds:

  • ₹40 lakh for supply of goods (₹20 lakh for special category states),
  • ₹20 lakh for supply of services (₹10 lakh for special category states),

then registration under GST is mandatory, as per:

🔹 Section 22(1) of the CGST Act, 2017 – Persons liable for registration

This provision ensures that only those businesses whose turnover exceeds these limits come under the GST framework.

Use this opportunity to understand your compliance requirements and seek clarity through the government workshops and helpdesks. The objective is not to harass, but to ensure everyone is on the right side of the law and is informed.

Legal Reference:

  • Section 22(1), CGST Act, 2017: Every supplier shall be liable to be registered under this Act in the State or Union territory from where he makes a taxable supply of goods or services if his aggregate turnover in a financial year exceeds:
    • ₹40 lakh (goods),
    • ₹20 lakh (services),
    • ₹10 lakh (special category states).
  • Section 24(i), CGST Act, 2017: Certain persons are required to register irrespective of turnover (e.g., inter-State supply, reverse charge, etc.).

If you’re unsure whether your receipts (including UPI transactions) cross the registration threshold, it’s recommended to consult a Chartered Accountant or GST practitioner.