Small Traders Protest Against GST Notices on UPI Transactions, Bandh Announced on July 25
According to sources, the notices were issued by the Karnataka Commercial Tax Department, which has made hundreds of traders' mandatory to register for GST after analyzing UPI payments.
Thousands of small traders in Bengaluru have called for a city-wide bandh on July 25. The decision has been taken by traders who are unhappy with the GST notices issued based on UPI transactions related to the financial year 2021-22. According to sources, the notices were issued by the Karnataka Commercial Tax Department, which has made hundreds of traders’ mandatory to register for GST after analyzing UPI payments.
The department found that the annual turnover of many unregistered shopkeepers has crossed Rs 40 lakh, which falls under the ambit of GST. Following the revelation, the government has issued notices to hundreds of traders, ordering them to register as well as pay past tax dues. Several traders are also facing legal action, confiscation and eviction threats.
Traders have taken to the path of protest, calling the move unfair. They say that the government itself first promoted digital payments, and now these same UPI transactions are being taxed retrospectively. In several markets in Bengaluru, traders have stopped accepting payments through UPI and have put up “NO UPI” boards on their shops.
In one incident, a panipuri vendor registered an annual UPI income of Rs 40 lakh, for which he too received a notice. However, small shopkeepers like him are now relying on cash and want to avoid coming under the ambit of GST.
This situation is giving a major setback to the digitization efforts in the informal economy. The boycott of UPI payments has emerged as a silent rebellion against the government’s “Digital India” campaign.
The impact of this development in Karnataka is also being seen in neighbouring states. Small traders in Maharashtra and Telangana have also become vigilant on this issue. Many shopkeepers, especially in Hyderabad, are hesitant to accept UPI payments, fearing that they too may come under the government’s scrutiny.
On the other hand, the Karnataka government has declared the notices issued based on UPI data as completely legal and legitimate. Officials say that if a shopkeeper’s business exceeds the prescribed limit, he will have to comply with tax laws.
