The Chief Minister's Office of Karnataka on Friday, 26 June 2026 shared directives issued by Chief Minister D K Shivakumar at a Commercial Taxes Department progress review meeting held at Vidhana Soudha, Bengaluru, highlighting a 9 per cent GST growth rate for the state and outlining firm measures to curb tax fraud.

Context

Speaking at the review meeting, CM Shivakumar noted that Karnataka's 9 per cent GST collection growth surpasses the national average and outperforms major states including Gujarat (5 per cent), Tamil Nadu (7 per cent), Haryana, and Uttar Pradesh (8 per cent). Only Telangana, which recorded 10 per cent growth up to May 2026, ranks above Karnataka, placing the state second in the country. Maharashtra recorded 5 per cent growth over the same period.

The Chief Minister stated plainly: 'ನಾವು ದೇಶದಲ್ಲೇ ಎರಡನೇ ಸ್ಥಾನದಲ್ಲಿ ಇದ್ದೇವೆ' ('We are in second place in the country') and directed officials to find pathways to reach first rank.

Policy Backdrop

India's Goods and Services Tax, introduced on 1 July 2017, unified multiple central and state levies into a single indirect tax framework. Since rollout, fake invoicing and bogus Input Tax Credit (ITC) claims have emerged as persistent systemic challenges for state revenue departments nationwide.

Karnataka has partnered with IIT Hyderabad to build a GST analytical portal that enables 360-degree surveillance of collections, leakages, and fraud — covering registrations, filings, and refunds. The collaboration has already helped detect multiple categories of GST fraud, though officials acknowledged that full capability is yet to be realised.

Stakeholders and Impact

Enforcement action against bogus companies has yielded a recovery of Rs 166 crore, and the Chief Minister called for a significant increase in arrests of those who register fraudulent firms. He warned that lapses by departmental staff would attract strict disciplinary action.

On taxpayer services, the government has implemented a citizen-friendly online system that resolves all tax-related queries digitally, removing the need for taxpayers to visit offices in person. Shivakumar stressed further simplification of the system to make it more taxpayer-friendly.

The Mysuru division was specifically flagged for a decline in performance. The Chief Minister made clear that excuses would not be accepted: 'ಫಲಿತಾಂಶ ಮುಖ್ಯ' ('Results matter'), directing officials to resolve technical difficulties independently and deliver improved outcomes. He also expressed zero tolerance for delays in disposal of pending GST appeals, instructing senior officers to personally monitor the process.

What's Next

Officials have been directed to provide clear, division-wise explanations for shortfalls against assigned targets and to accelerate appeal clearances. The state's stated ambition is to displace Telangana and claim the top GST growth rank nationally. Sustained enforcement against bogus firms, deeper utilisation of the IIT Hyderabad analytical portal, and the full rollout of online grievance resolution for taxpayers will be the key milestones to watch in the months ahead.