Bengaluru GST row: Small scale traders and merchants in Karnataka have expressed grave apprehension following the receipt of GST notifications from the commercial tax authorities regarding UPI transactions surpassing Rs 40 lakh per year. They have appealed to the authorities to withdraw these notices and sought leniency in implementing these regulations for small-scale vendors.The issue came to light after it was reported that vendors in Bengaluru are increasingly declining UPI as a payment mode, asking customers to pay in cash instead.A vegetable vendor from Haveri, Shankar Gowda Hadimani, expressed his worries after receiving a tax notice of ₹29 lakh from the Bengaluru Tax Office.According to an ANI report he explained, “… Since there are no GST rules on fruits and vegetables, I did not register for GST number. But I got a notice to pay Rs 29 lakh in taxes for a business of over Rs 40 lakh… The officials have told me that if it is proven that I have done so much business in vegetables, the notice will be withdrawn…”Abhilash Shetty, representing the Karnataka Pradesh Street Vendors Association, was reported as saying, “Small businesses run with a margin of 5 to 10 percent… The tax (GST) along with other things like penalty, comes to 50% and it is not possible for the vendors to pay such a huge tax with this. We request the government to interfere and give relaxation to the small vendors in this matter…”Advocate Shakuntala, the legal counsel for the association, supported these concerns whilst criticising the authorities for not properly informing small vendors about their taxation responsibilities during business registration.She remarked, “If taxes are being imposed, why were they not educated first?… When they took the registration, they should have been made aware about the taxes on selling of goods, revenue…”BJP has criticised the issuance of GST notices for UPI transactions in Karnataka. BJP spokesperson Amit Malviya stated, “Congress is destroying small businesses in Karnataka. In a recent mindless crackdown, Karnataka GST authorities have issued heavy-handed notices to small vendors under the pretext of GST evasion — many running into lakhs of rupees. The data from UPI transactions is being weaponized to raise arbitrary tax demands. As a result, thousands of small traders in Bengaluru are now abandoning digital payments altogether. This is not just harassment — it is economic sabotage.”He further added, “Under GST law, the burden of proof lies with the tax officer — not the trader. Why then is the Congress government unleashing this coercion on those who form the backbone of our economy? This is nothing but a desperate attempt to fund their freebie culture. And yet, Rahul Gandhi has the audacity to claim he stands with small businesses.”
