Satisfied with the CM’s assurance and overall outcome of the meeting, various associations of small traders called off a state-wide bandh they had planned for July 25.
The commercial taxes department has issued notice only in cases where annual UPI transactions have exceeded the yearly turnover cap of Rs 40 lakh in the case of goods and Rs 20 lakh in the case of services, the CM said, briefing the media about the outcome of the meeting.
The commercial taxes department has issued about 18,000 notices over the past three years to about 9,000 businessmen and would not pursue them only on the condition that the merchants who have received notices must come forward and get themselves registered for the GST, the CM said. The government would write off the tax arrears of merchants who take GST registration, and on the condition that they would pay the GST in the future, he added.
He also clarified that the government has asked officials not to collect tax from merchants on GST-exempt goods such as milk, flowers, vegetables, and meat. People who deal only with tax-exempt goods need not register.
The CM also asked the GST authorities to run extensive awareness campaigns and educate merchants about indirect tax laws while insisting that the government would protect the interests of small businesses and vendors and help them carry out their businesses in a lawful way.
Karnataka ranked second in India in GST collection and shares half the revenue with the Union government as decided by the GST Council, Siddaramaiah said.
Trade union representatives earlier raised concerns about confusion among small traders regarding the GST demands, many of which included loans and personal transactions. They urged the government to allow traders to directly resolve issues with state GST authorities without the need for intermediaries.
Earlier, scores of businessmen in Bengaluru, Mysuru, Hubballi-Dharwad, Mangaluru, and other cities in Karnataka had dumped their QR codes and put up signboards that they would accept only cash payments from customers for fear that UPI payments would invite heightened surveillance by GST authorities. The GST officials went by the UPI payment data for the financial years 2021-22 to 2024-25 and claimed the tax dues.
The CM, however, warned merchants that moving away from UPI transactions would adversely affect their business.
