Bengaluru Street Vendors Get GST Notices on UPI Transactions | Small Businesses Protest - video Dailymotion

Asianet News English

Thousands of street vendors in Bengaluru are facing GST notices following UPI transactions crossing the ₹40 lakh threshold, sparking widespread protests and calls for government relief. Despite running low-margin businesses, many vendors received hefty tax notices, pushing them to reject digital payments and revert to cash transactions. Vendor associations demand relaxation of GST enforcement, citing a lack of prior education and unrealistic tax burdens on small traders.&nbsp;

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00:00The Silicon Valley of India, Bengaluru, is grappling with an economic paradox.

00:06The very push for digital empowerment has turned into a nightmare for its street vendors.

00:12A sudden wave of GST notices served to small traders, based solely on their UPI transaction

00:19histories, has thrown the informal sector into panic. Food stalls, vegetable carts,

00:26and T-vendors, many of whom should be exempted from taxes, are now receiving tax notices,

00:33as authorities mistake their digital payment records for taxable income.

00:39Watch as we entangle Bengaluru's digital debacle and hear from affected vendors.

00:56Bengaluru's informal sector has enthusiastically embraced digital payments over the last few

01:05years. QR code stickers in shops had become very common. Vendors were using UPI transactions

01:13to collect payments. But this digital revolution hid a lurking danger. Few considered the complexity

01:21of taxes or regulation. This month, hundreds of small traders and tiny shopkeepers received goods

01:29and services tax or GST notices. The GST authorities alleged their UPI records reflected turnovers as

01:36high as 1.5 crore rupees over the last three years, well above the 40 lakh rupees annual threshold

01:43for mandatory GST registration. A vegetable trader in Haveri, Shankar Gowda Hadimani, received a GST notice

01:52to pay $29 lakh rupees to pay for taxes.

01:55The GST rules is the basis of GST rules. I don't have a tax on the GST rules.

02:02But I don't have a tax on the goods, vegetables and vegetables. This is why I didn't have a number.

02:07But what I did now? I told my name. I told my GST notice.

02:13So, for 4 years, I received a tax tax for $29,000,000 for the tax.

02:24So, I will go and ask,

02:28I will say,

02:30I will say,

02:32I will say,

02:34He says, since there are no GST rules on fruits and vegetables, he did not register for any

02:53GST number.

02:54But he got a notice to pay Rs. 29 lakh in taxes for a business of over Rs. 40 lakh.

03:02Authorities scrutinized UPI transaction data from payment apps.

03:06For small businesses, these records include not just sales, but sometimes personal transfers,

03:12supplier settlements and refunds, amounts never intended as taxable business income.

03:20Many were dealing in products which should simply be exempted from GST.

03:24The people are now, who is doing the small businesses with their small funds and all,

03:29they are doing this business for just 5 to 10% margin.

03:32So now the government, if the commercial tax department has given the notices, where the

03:38condiments are dealing with the many more items which falls under 18%, 5%, 0 rated, even

03:4540% with sales and 28% tax.

03:48So now, when they have done the business with 5% margin, now they are not able to pay 18%

03:55or 28% tax with penalty altogether will come around 50%, sir.

03:59It's real, practically, it is not possible only.

04:02The response was immediate and dramatic.

04:05Vendors pulled down QR codes, signs reading cash-only, no UPI, replaced pay-by-scan.

04:11Bengaluru's informal trade was plunged back into the cash era, with many fearing deregistration,

04:18back taxes and even seizure of assets.

04:22Some groups blamed the government for not clarifying tax compliance requirements before promoting

04:29UPI adoption at the grassroots.

04:31The controversy soon turned political.

04:33Karnataka's ruling Congress accused the central government of weaponising digital payment

04:39trails for tax harassment.

04:40The BJP shot back, blaming state revenue officials.

04:45Data privacy advocates are also raising new alarms.

04:48Are UPI platforms sharing personal financial data with revenue departments automatically?

04:53Is there informed vendor consent?

04:56Many see a dangerous precedent, with data-fuelled governance outpacing privacy protections.

05:03For now, the Karnataka GST department clarified that vendors can contest notices and exclude

05:09GST-exempt goods from turnover.

05:12However, the fear remains, as many lack documentation or trust in the process.

05:17The resulting uncertainty sees UPI's credibility in the informal sector severely shaken.

Bengaluru Street Vendors Get GST Notices on UPI Transactions | Small Businesses Protest

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