Bengaluru | July 25, 2025 — In a new compliance advisory, the Commercial Taxes Department of Karnataka has stated that high-value UPI transactions may fall under the Goods and Services Tax (GST) registration requirement, even if the individual or entity is currently unregistered.
📌 Key Thresholds:
- ₹20 lakh for services
- ₹40 lakh for goods
If your annual digital receipts via UPI exceed these limits, you may be liable to register under GST, according to the state’s tax authority.
🎯 Who is Affected?
- Freelancers and consultants
- Influencers and digital creators
- Small traders and solopreneurs
- Home-based businesses using UPI for payments
📣 Official Clarification:
“If a person has transacted over ₹20 lakh for services or ₹40 lakh for goods in a year through UPI, it indicates that they may be liable to register under GST,” said an official from the Commercial Taxes Department of Karnataka.
⚠️ Why This Matters:
Many small businesses and professionals use UPI as a low-friction payment method but may not be aware of the GST thresholds. The move appears to be part of a broader crackdown to identify unregistered businesses operating in the digital economy.
🧾 What Should You Do?
- Track your cumulative UPI receipts
- Separate personal vs business UPI usage
- Consult a tax professional if nearing or crossing thresholds
- Consider voluntary GST registration for legitimacy and ITC benefits
This comes as GST authorities across India ramp up the use of AI tools and transaction analytics to detect tax evasion in digital transactions.
📖 Stay tuned to Allycaral.com for more regulatory and fintech updates.
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