Karnataka GST Evasion Cases Jump Fivefold to ₹39,577 Crore in FY25, Says Finance Minister

The Central GST (CGST) department detected tax evasion worth ₹39,577 crore in Karnataka during the 2024-25 financial year, more than five times higher than the previous year. A total of 1,254 cases were recorded, with 9 people arrested. During the year, voluntary tax payments totalled ₹1,623 crore. 

Minister’s Clarification on UPI Transactions

In a written reply to the Lok Sabha, Finance Minister Nirmala Sitharaman stated that the CGST authorities have not issued any notices solely on the basis of UPI transactions. This statement comes amid reports that several small traders and shopkeepers in Bengaluru received high-value GST notices based on digital transaction data, which were sent by State GST offices, not the central department.

Year-Wise GST Evasion Figures in Karnataka

• 2024-25: 1,254 cases, ₹39,577 crore evasion, nine arrests, ₹1,623 crore voluntary payment.
   
• 2023-24: There were 925 cases involving tax evasion of ₹7,202 crore, with two arrests made and voluntary payments totalling ₹1,197 crore.
   
• 2022-23: 959 cases, ₹25,839 crore evasion, two arrests, ₹1,705 crore voluntary payment.

Government’s Response to Traders’ Concerns

The minister’s remarks addressed a question about whether GST notices were being sent to small traders and street vendors without assessing their actual business activities. While clarifying the central department’s role, the data presented showed a sharp rise in GST evasion detection efforts.

Read more: IRDAI Slaps ₹5 Crore Fine on Policybazaar for Multiple Violations.

Conclusion

Karnataka’s GST evasion figures for FY25 show an unprecedented spike, highlighting both stronger enforcement and possibly more widespread tax violations. While the government denies issuing notices based on UPI transactions alone, the sharp jump in evasion cases suggests that compliance monitoring has intensified significantly.

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