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The government has reiterated that there is no plan to levy goods and services tax (GST) on unified payments interface (UPI)-based transactions exceeding Rs 2,000.

Pankaj Chaudhary, Minister of State of Finance, said in the Rajya Sabha that "there is no recommendation of levying GST on UPI transactions of over Rs 2.000 from the GST Council”.

Answering a question about whether the government is considering a proposal to levy GST on UPI transactions of over Rs 2,000, the minister told the House that GST rates and exemptions are decided on the basis of recommendations of the GST Council.

The reply came after traders in Karnataka received GST demand notices based on UPI transaction data.

Minister for Food, Public Distribution and Consumer Affairs, Pralhad Joshi, also said last week that the GST notices issued to small-scale traders in Karnataka are the doing of the state government, and not from the Central government.

Responding to Deputy Chief Minister D.K. Shivakumar’s claim that the state has no role in issuing tax notices, Joshi called the statement “utterly ridiculous.”

“It is Karnataka’s commercial tax officials who issued the GST dues notices to small traders. And yet, the state government is now misleading the public by pretending it has no involvement. This is nothing but an attempt to shirk responsibility,” Joshi said.

“If the GST notices had been issued by the central government, then traders in several other states would have received them. But that hasn’t happened anywhere else. Why are these notices being sent only in Karnataka?” Joshi questioned.

He clarified that under GST, there are two components – CGST (Central GST) under the central government and SGST (State GST) under state governments. The notices to small traders in Karnataka were issued by the state’s Commercial Tax Department.