Input tax credit fraud uncovered in iron and steel sector; arrests made and significant GST loss detected, investigation ongoing
CGST Ludhiana conducted targeted searches in Mandi Gobindgarh uncovering a syndicate that used five firms and acquired debt ridden rolling mills as fronts to fraudulently avail and pass on Input Tax Credit; two operators were arrested, a preliminary assessment attributes extensive bogus invoices and a substantial GST revenue shortfall to the scheme, and investigations to identify additional entities are ongoing.

GST collection linked to improved facilities and incentives, boosting voluntary tax compliance and industrial growth.
Government investment in infrastructure and incentives is described as improving business conditions and expanding the taxable base, thereby raising Goods and Services Tax receipts; higher collections are attributed to increased public trust that tax revenue funds welfare, alongside targeted beneficiary coverage under welfare schemes.

GST compliance reforms bolstered state revenue and fiscal stability, improving collections and public employment outcomes.
The government attributes strengthened fiscal stability to tax reforms that increased GST collections, improved tax compliance and expanded revenue, citing cumulative GST compensation cess receipts and a substantial rise in excise revenue; it connects these fiscal gains to improved GSDP performance and increased merit-based government employment.

GST registration enforcement: government will not pursue older tax arrears if traders register and remit taxes moving forward.
The government announced that preliminary GST notices based on UPI transaction data were issued to prompt registration, that recipients retain the right to respond with supporting documentation, and that older tax arrears will not be pursued provided affected traders register under the GST Act (with businesses dealing exclusively in exempted goods excluded) and begin complying with tax obligations; officials also committed administrative assistance and withdrawal of notices where replies or exemptions are convincing.

GST registration requirement clarified: state will not pursue arrears on exempted goods if traders register and comply.
State will not pursue historical tax notices for traders on exempted goods if traders register under GST and comply going forward, while businesses dealing solely in exempted supplies are not required to register; notices based on UPI transaction data were aimed at prompting GST registration and enforcement action on those past notices will be withdrawn. A helpline will be set up to assist traders with registration and compliance.

GST notices to small traders spur withdrawal demands and statewide trader protest call over UPI-linked scrutiny
Issuance of GST notices to small and micro traders, tied to UPI transactions, is alleged to be indiscriminate and driven by fixed revenue targets for tax officials; the state BJP leader demands immediate withdrawal and a halt to further notices, and supports traders' calls for a UPI boycott and a statewide strike as their primary response.

GST registration liability flagged by UPI data prompts provisional notices; traders may respond with evidence to avoid demand.
Provisional GST notices have been issued using UPI transaction data as an indicator that a person may have exceeded the statutory turnover thresholds for registration. These notices are preliminary proposals to register and to pay applicable taxes, interest and penalties, and recipients have the right to reply with supporting documentation, claim exemptions for wholly or partially exempt supplies, seek hearings, and obtain withdrawal of the notice if the response establishes nil taxable turnover.

GST registration liability flagged by UPI data may trigger provisional notices requiring response or registration compliance.
Notices based on UPI transaction data were issued to identify persons potentially liable for GST registration and payment where turnover appears to exceed statutory thresholds; the notices are provisional proposals inviting written replies and supporting evidence, personal hearings, and consideration of exempt supplies, with final assessment and any tax, interest or penalty determined only after the recipient's response and further administrative steps.

Destination-based GST: tax accrues where consumption occurs, preventing revenue loss from out-of-state corporate billing.
GST revenue accrual follows the destination-based principle: tax is recognized in the State/UT where goods or services are consumed regardless of corporate billing location or manufacturing site; routing sales or declaring a point of sale outside the State does not cause loss of State GST if consumption occurs within the State.

GSTR-3A notices generated erroneously due to system glitch; affected taxpayers with cancelled registrations or filed returns need not respond.
Advisory explains a system glitch caused GSTR-3A notices for alleged non-filing of GSTR-4 to be issued inapplicably, including to taxpayers with registrations cancelled prior to the affected year; it directs that taxpayers who filed the return or whose registrations were cancelled need not act, and advises lodging other grievances via the Self-Service Portal while technical corrective measures are implemented.

Anti-corruption helpline established for reporting bribe demands in tax administration tied to digital payments compliance.
The Commercial Taxes Department in Karnataka has established a dedicated helpline and reporting mechanism to address allegations of departmental staff soliciting payments and middlemen extorting traders in UPI-related tax matters; the department affirmed a zero-tolerance policy, pledged strict disciplinary action on substantiated complaints, and urged traders to report incidents through the helpline during specified hours.

Auto-population of inter-state supplies in GSTR-3B will be non-editable; correct GSTR-1/IFF reporting ensures accurate returns.
Auto-populated inter state supply values in Table 3.2 of GSTR-3B will be non-editable from the July 2025 tax period; taxpayers must file GSTR-3B with system-generated values and correct any inaccuracies by amending GSTR-1, filing Form GSTR-1A, or using IFF in subsequent periods so that Table 3.2 auto-populates accurately.

Excise compliance failures led to significant unrecovered revenue due to assessment, approval and valuation deficiencies.
Operational lapses in excise administration-incorrect licence renewal fee assessments, failure to implement revised supervision fees, unauthorised exemptions for old beer stock, delayed chemical analysis of mild beer, inapplicability of privilege-fee rules to major shareholding changes, absence of a production-cost declaration requirement, and valuation errors in CSD and imported liquor-caused multiple recoverable excise and fee shortfalls, reflecting weaknesses in fee assessment, approval controls, evidentiary testing, and statutory coverage.

Excise audit lapses expose systemic revenue shortfalls and procedural failures, prompting scrutiny of licence, valuation and duty controls
The audit finds procedural and valuation deficiencies in the Excise Department-incorrect licence renewal fee assessments, non-implementation of revised supervision fees, unauthorized duty exemptions on old beer stock, delayed chemical analysis of mild beer samples, lack of provision for declaring production cost, failure to charge fees on major shareholding changes under the privilege fee rules, undervaluation of CSD production costs, and errors in imported liquor purchase costs-each causing quantifiable losses to excise revenue.

GST reform urged to revive the economy; end punitive tax enforcement and favoritism to restore consumption and investment.
A political statement urges immediate GST reform to revive the economy, citing slowing credit, exports and GST collections, weak private consumption (including real estate and vehicle sales), reduced electricity and diesel use, and poor growth in core industries; it highlights weak agricultural prices and corporate focus on cashflow through wage and capital expenditure cuts. It further demands ending aggressive tax enforcement termed "tax terrorism" and stopping policy favouritism toward a few large business groups as conditions for meaningful economic recovery.

Consent notification: taxpayers to receive alerts on OTP-based API access and may revoke active consents via portal.
The GST System will introduce an OTP consent notification sending email/SMS alerts to the taxpayer's authorised signatory when an ASP obtains OTP-based consent via a GSP, including ASP/GSP identity, date and time of consent, and validity period; the Common Portal will also display current and historical ASP/GSP access and permit taxpayers to revoke active consents from their dashboard.

GST registration and liability apply regardless of payment mode; refusing UPI does not avoid tax obligations under GST.
The communication clarifies that GST registration and tax liability are determined by consideration received for supplies irrespective of payment mode; receipts via UPI, POS, bank transfers or cash are all relevant. Refusing a payment method does not eliminate GST obligations. Notices issued after tracing transactions through UPI reflect that the department treats UPI as one of several receipt mechanisms and will pursue applicable tax collection under the GST Act from traders who have received consideration in any form.

Appeal against waiver rejection orders can be filed on the GST portal using APL 01, but withdrawal is not available.
The GST Portal permits filing an appeal against a Waiver Application Rejection Order (SPL-07) by submitting Appeal Application APL-01: navigate to Services User Services My Application, choose Appeal to Appellate Authority, create a New Application, select Order Type as Waiver Application Rejection Order, and provide required details before filing. The portal does not allow withdrawal of such appeals; restoration of a previously withdrawn original appeal is permitted by filing an undertaking in the Orders section of the Waiver Application case folder. For issues, raise a GST Helpdesk ticket.

VAT waiver for long-pending dues eases compliance; GST amendments lower appeal pre-deposit, clarify vouchers and exclude SEZ warehousing.
The government will write off legacy VAT demands up to a specified threshold in cases pending over ten years and introduce two amendment bills to adjust GST rules: reducing mandatory pre-deposit for penalty-only appeals, deleting the Time of Supply provision for vouchers to ensure uniformity, and excluding SEZ warehousing transactions from GST coverage to support intra-SEZ trade.

Tax hikes prompt statewide hospitality bandh, signaling unified industry protest over increased liquor taxation and licence fees.
Industry associations have organised a statewide shutdown protesting recent increases in liquor value added tax, annual licence fees and excise duty, arguing that these measures, combined with post-pandemic pressures, make business models unviable, threaten employment, and risk a rise in illicit liquor trade.