Karnataka witnesses 5-fold jump in GST tax evasion at ₹39,577 crore in FY25

Central GST officers in Karnataka detected tax evasion of ₹39,577 crore in the 2024-25 fiscal year, an over 5-fold jump from the year-ago period, Parliament was informed on Monday.

In a written reply in the Lok Sabha, Finance Minister Nirmala Sitharaman said, "Central GST authorities have not issued any notices based on UPI transactions".

The minister was replying to a question on whether the government has issued GST notices to small traders and street vendors in the country, including Karnataka, without assessing their business activities.

Last month, numerous small traders and shopkeepers in Bengaluru, Karnataka, received disproportionately high GST notices primarily based on digital footprints, such as UPI transactions. The notices were sent by State GST field offices.

To another question on the details of GST evasion detected in Karnataka, Sitharaman shared the details of cases by the Central Tax formations pertaining to the state.

In 2024-25, 1,254 cases involving ₹39,577 crore of Goods and Services Tax (GST) evasion were detected by CGST officers. Nine persons were arrested, and ₹1,623 crore voluntary payments were made.

The amount detected by CGST officers in FY25 was over 5 times that of FY24.

In 2023-24, 925 cases were detected involving ₹7,202 crore evasion. Two persons were arrested, and ₹1,197 crore was recovered by way of voluntary payment of tax.

In 2022-23, 959 cases involving ₹25,839 crore tax evasion were detected by CGST officers. Two persons were arrested, and a ₹1,705 crore voluntary tax payment was made.