Karnataka Chief Minister Siddaramaiah announced that the state will not pursue tax notices issued to traders for arrears on exempted goods and services from the past three years, prompting traders to call off their planned strike on July 25. The decision follows protests sparked by approximately 6,000 tax notices linked to Unified Payment Interface (UPI) transactions, which had led traders in Bengaluru and across Karnataka to threaten a boycott of UPI payments.

After meeting with trade bodies, including the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), Siddaramaiah assured traders that notices for exempted goods like bread, milk, fruits, vegetables, flowers, and tender coconut will not be enforced. He urged traders to register under GST for future compliance, stating, “Old tax arrears will not be pursued, provided traders register and pay GST moving forward.” Businesses dealing solely in exempted goods are exempt from registration.

The Chief Minister clarified that notices targeted traders with UPI transactions exceeding Rs 40 lakh to encourage GST registration. To address concerns about notices mistakenly including loan amounts and personal transactions, a helpline will be strengthened for better accessibility. Siddaramaiah emphasized supporting small traders, noting Karnataka’s second-place ranking in national GST collection, with 50% of revenue shared with the Centre, as per the GST Council.

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The government’s focus remains on empowering traders and enhancing purchasing power through trader-friendly initiatives, ensuring lawful business practices without undue harassment.

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