Karnataka: GST evasion surges 5x to almost ₹40,000cr in FY25
What's the story
Karnataka has witnessed a massive five-fold increase in the amount of Goods and Services Tax (GST) evasion detected in the fiscal year 2024-25. The Central GST (CGST) officers detected tax evasion worth ₹39,577 crore during this period, Finance Minister Nirmala Sitharaman informed the Lok Sabha today. This is the highest amount of GST evasion detected in three years.
Enforcement measures
Arrests and voluntary tax payments
In FY25, CGST officers registered 1,254 cases of GST evasion. They arrested nine people and recovered ₹1,623 crore through voluntary tax payments. The spike in tax evasion detection for FY25 is particularly stark when compared to the previous fiscal year (2023-24), which saw only 925 cases of ₹7,202 crore in evasion detected.
Record figures
Comparison with previous fiscal year
The figures for FY25 also exceed those of FY23 when CGST officers detected ₹25,839 crore in evasion from 959 cases. In that year, two arrests were made and ₹1,705 crore was recovered voluntarily. The sharp increase in GST evasion cases comes amid ongoing protests by traders in Bengaluru against alleged "excessive" GST notices sent by State GST field offices, based on digital transaction data like UPI records.
Clarification issued
Clarification on GST notices
In light of the protests, Sitharaman has clarified that Central GST authorities have not issued any notices based on UPI transactions. She said the responsibility lies with State GST field offices, which were responsible for the recent notices in Karnataka.