Executive Summary:
This document is the Minister of Finance's response to Lok Sabha Starred Question No. 309 regarding GST notices to small traders and street vendors, GST evasion in Karnataka, and simplification of GST compliance for small traders. The response clarifies that no GST notices have been issued based on UPI transactions by Central GST authorities. It also details GST evasion cases in Karnataka and outlines measures taken to simplify GST compliance for small businesses.
Key Points / Main Content:
* **GST Notices and UPI Transactions:**
* Central GST authorities have not issued any GST notices based on UPI transactions.
* **GST Evasion in Karnataka (Central Tax Formations):**
* Details of GST evasion cases in Karnataka are provided for the years 2022, 2023, and 2024, including the number of detections, voluntary payments, persons arrested, and amounts involved.
* 2022: 959 cases, ₹23 Cr. voluntary payment, ₹25839 Cr. detection, 2 persons arrested
* 2023: 925 cases, ₹7202 Cr. voluntary payment, ₹1197 Cr. detection, 24 persons arrested
* 2024: 1254 cases, ₹39577 Cr. voluntary payment, ₹1623 Cr. detection, 9 persons arrested
* **Measures for Simplified GST Compliance for Small Businesses:**
* **GST Registration Not Required (Trade Facilitation):**
* Intra-State taxable supply of goods: Turnover not exceeding ₹40 lakhs (₹20 lakhs for certain special category states).
* Intra-State or Inter-State taxable supply of services: Turnover not exceeding ₹20 lakhs (₹10 lakhs for certain special category states).
* **Composition Levy Scheme:**
* Alternate tax levy method for small/medium taxpayers with turnover up to prescribed limit.
* Uniform tax rate: 1% (0.5% under CGST Act and 0.5% under respective SGST Act) for traders and manufacturers of goods; 5% (2.5% under each Act) for restaurants.
* **Quarterly Returns with Monthly Payment:**
* Eligible registered persons with annual turnover up to ₹5 crores in the preceding financial year can opt for quarterly returns with monthly tax payment.
* **Optional Annual Returns:**
* Filing of Annual Returns for FY 2017-18 to FY 2023-24 is optional for small taxpayers with annual turnover up to ₹2 crores.
Impact Analysis
Small Traders and Street Vendors:
* Impact: Reassurance that no GST notices have been issued based on UPI transactions. Benefit from simplified GST compliance measures.
* Action Required: Assess eligibility for exemptions and simplified schemes like the composition levy scheme and quarterly returns.
Small and Medium Enterprises (SMEs):
* Impact: Benefit from relaxed GST registration requirements based on turnover.
* Action Required: Determine if their turnover falls below the threshold for mandatory registration and explore options for simplified compliance.
GST Department (Central and State):
* Impact: Acknowledgment of ongoing GST evasion and measures to address systemic flaws.
* Action Required: Continue monitoring GST evasion, implement and refine measures to simplify compliance, and ensure effective tax collection.
Key Entities Referenced
GST: Goods and Services Tax, an indirect tax in India.
Lok Sabha: The lower house of the Parliament of India.
Ministry of Finance: A ministry in the Government of India responsible for the financial matters of the country.
Nirmala Sitharaman: The Minister of Finance of India.
Karnataka: A state in South India.
UPI: Unified Payments Interface, an instant real-time payment system in India.
GST Council: A constitutional body responsible for making recommendations on GST-related issues in India.
CGST Act: Central Goods and Services Tax Act, the law governing the central GST in India.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
STARRED QUESTION NO. 309*
TO BE ANSWERED ON MONDAY, THE 11th AUGUST, 2025 / SRAVANA 20, 1947 (SAKA)
GST Notices to Small Traders/Street Vendors
*309. DR. K SUDHAKAR:
SHRI TEJASVI SURYA:
Will the Minister of FINANCE be pleased to state:
(a) whether the Government has issued GST notices to small traders and street vendors in the
country without assessment of their business activities including Karnataka;
(b) if so, the details thereof, State/UT-wise;
(c) whether the Government plans/proposes to withdraw such notices and address the distress
caused to such traders/vendors due to notices on UPI transactions;
(d) whether it is true that GST evasions have been happening in Karnataka, if so, the details
thereof including the total volume/number of evasions detected in the State;
(e) whether such evasions are due to systemic flaws within the GST Department and if so, the
details thereof along with the estimated loss of GST to Karnataka; and
(f) the measures taken/to be taken by the Government to simplify GST compliance for small
traders and reduce their regulatory burden?
ANSWER
THE MINISTER OF FINANCE
(SMT. NIRMALA SITHARAMAN)
(a) to (f): A Statement is laid on the Table of the House.
*****STATEMENT REFERRED TO IN REPLY TO PARTS (a) to (f) OF LOK SABHA STARRED
QUESTION NO. 309* DUE FOR ANSWER ON 11th AUGUST, 2025
(a) to (b): No. Central GST authorities have not issued any notices based on UPI transactions.
(c): does not arise in view of the answer to (a) and (b) above.
(d): The details of GST evasion cases by the Central Tax formations pertaining to the State of
Karnataka is as under:
Period No. Detection Voluntary No. of
of (Rs. in payment persons
cases Cr.) (Rs. in Cr.) arrested
2022-
959
23 25839 1705 2
2023-
925 7202 1197 2
24
2024-
1254 39577 1623 9
25
(e): No.
(f): A number of measures have been taken by the Government on the recommendations of
GST Council for the benefit of small business sector which includes: -
(1) For trade facilitation, small and medium enterprises are not required to obtain GST
registration: -
(i) Persons involved in Intra-State taxable supply of goods, if his aggregate turnover in a
financial year does not exceed Rs. 40 lakhs (Rs. 20 lakhs for certain special category states);
(ii) Persons involved in Intra-State or Inter-State taxable supply of Services, if his aggregate
turnover in a financial year does not exceed Rs. 20 lakhs (Rs. 10 lakhs for certain special
category states)
(2) Composition levy scheme in GST is an alternate method of levy of tax designed for small
and medium taxpayers whose turnover is up to the prescribed limit. A uniform rate of tax @1%
(0.5% under the CGST Act and 0.5% under the respective SGST Act) is payable on supplies by
traders of goods and manufacturers of goods and 2.5% under each Act for supplies by
restaurants.
(3) All eligible registered person having annual turnover up to Rs. 5 crores in the preceding
financial year may opt for filing of quarterly returns with monthly payment of tax.
(4) Filing of Annual Returns for FY 2017-18 to FY 2023-24 have been made optional for small
taxpayers with annual turnover of up to Rs. 2 crores.
******