Bengaluru small businesses mull 3-day protest over GST notices, plan bandh on July 25: Report

Bengaluru small business owners, including milk vendors, planned a three-day protest starting July 23 against GST notices related to UPI transactions.

Small business owners across Bengaluru, including milk vendors and bakery operators, have planned a three-day demonstration from July 23 in response to receiving GST notices associated with UPI transactions. Many traders have suspended the sale of milk and dairy products, escalating the protest’s visibility on July 23 and 24, a report from Moneycontrol stated.

Bengaluru GST-UPI row: Small traders and businesses also planned a bandh on July 25. (Reuters)

The movement is set to culminate with a major ‘bandh’ - a shutdown rally - at the Freedom Park on July 25, with backing from cab and auto drivers who also fear increased GST scrutiny.

In the wake of growing unrest, the Karnataka government has introduced a comprehensive initiative titled ‘Know GST,’ aiming to educate and reassure traders about tax compliance requirements. The inaugural session of this campaign took place in Koramangala on Monday. To further aid affected business owners, the state’s Commercial Taxes Department has opened a helpline (1800 425 6300) and announced a series of informational workshops.

Small vendors have however petitioned the government to withdraw the GST notices and reconsider strict enforcement approaches impacting small-scale traders and businesses.

Meanwhile, a recent research note from SBI cautioned that stringent enforcement of GST via UPI transaction monitoring could inadvertently push small businesses back into the informal, cash-dependent market. The report emphasized that, while GST reforms have increased accountability and revenue, their long-term impact will only be successful if officials ensured the empowerment of small entrepreneurs, rather than penalizing them, according to news agency PTI.

The prevailing dispute has sparked heated exchanges between political rivals in Karnataka. The opposition BJP has accused the Siddaramaiah-led Congress government of targeting small enterprises through the sweeping GST crackdowns. Responding to criticism, Deputy Chief Minister DK Shivakumar asserted that the BJP was unjustly shifting the onus for GST notices served to traders onto the state government.

Many believed that the crackdown is driven by a major financial objective: Karnataka’s tax department is being pushed to achieve a revenue target of ₹1.2 lakh crore for the 2025–26 fiscal year. The state, having already committed more than ₹52,000 crore to welfare programs, is now under growing pressure from Congress lawmakers demanding more funding for infrastructure.