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

Karnataka recorded a dramatic surge in Goods and Services Tax (GST) evasion during the 2024–25 financial year, with the Central GST (CGST) department detecting evasion worth ₹39,577 crore—over five times higher than the previous year. The data, presented by Finance Minister Nirmala Sitharaman in a written reply to the Lok Sabha, also clarified that no notices were issued solely on the basis of UPI transactions by the central authorities.

FY25 GST Evasion Overview

• Evasion Amount: ₹39,577 crore.
• Cases Detected: 1,254.
• Arrests: 9 individuals.
• Voluntary Tax Payments: ₹1,623 crore.

The spike reflects enhanced detection and enforcement efforts by CGST authorities in the state.

Year-Wise GST Evasion Figures in Karnataka

2024–25

• 1,254 cases.
• ₹39,577 crore evasion.
• 9 arrests.
• ₹1,623 crore voluntary payments.

2023–24

• 925 cases.
• ₹7,202 crore evasion.
• 2 arrests.
• ₹1,197 crore voluntary payments.

2022–23

• 959 cases.
• ₹25,839 crore evasion.
• 2 arrests.
• ₹1,705 crore voluntary payments.

Clarification on UPI Transaction-Linked Notices

Responding to concerns that small traders and shopkeepers in Bengaluru had received high-value GST notices based on digital transaction data, the Finance Minister clarified,

• Central GST authorities have not issued any notices solely on the basis of UPI transactions.
• The reported notices were sent by State GST offices, not the central department.

Government’s Response to Rising Cases

The Finance Minister’s remarks addressed traders’ concerns over GST enforcement practices and highlighted the sharp increase in evasion detection in Karnataka. Officials attribute this rise partly to improved analytics, data-sharing mechanisms, and targeted inspections.