Govt Clarifies GST Notices to Traders: Action Based on UPI Data Indicating Turnover Above Threshold

Amid reports of GST notices being served to small traders, the state government on Friday clarified that the action stemmed from UPI transaction data collected from payment service providers, aimed at ensuring compliance with Goods and Services Tax (GST) norms.

As per the GST Act, which came into effect on July 1, 2017, any supplier with annual turnover exceeding ₹40 lakh for goods or ₹20 lakh for services is required to register for GST. The threshold includes both taxable and exempt supplies, though tax is levied only on taxable goods and services.

Clarifying the nature of taxable items, the Commercial Tax Department said essential goods like bread remain exempt from GST, while items such as packaged snacks attract a 5% levy.

The department revealed that UPI data from 2021–22 to 2024–25 indicated that several traders had received over ₹40 lakh through UPI transactions alone — not accounting for additional revenue via cash or other modes. This pointed to a significantly higher overall turnover, prompting the issuance of notices under GST provisions.