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Bengaluru’s street vendors abandon UPI, prefer cash. Tax heat to blame? - Report
Bengaluru's small scale vendors are shifting from UPI to cash payments due to fear of heavy taxes after being slapped with GST notices.
In a surprising twist for India’s “tech capital”, Bengaluru's street corners and marketplaces are slowly phasing out UPI payments and going old school with more cash payments — not due to tech failure, but due to fear of heavy taxes, Times Now reported.
Once championing QR-code payments for everything from ironing to betel leaves, many small vendors are now turning away digital wallets in favour of hard cash. Across the city, hand-written signs and printed notices stating “No UPI, only cash” have cropped up at roadside stalls, food carts and corner shops, the report stated.
This shift is for survival and not merely preference. Thousands of unregistered vendors have reportedly been slapped with Goods and Services Tax (GST) notices, some facing retroactive demands amounting to several lakhs.
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These notices, according to multiple lawyers and chartered accountants, are largely based on UPI transaction data traced back to FY 2021–22. For many vendors operating on the edge of informality, the digital trail has become a liability, the report said.
A Bengaluru-based lawyer and joint secretary of the city’s street vendors’ federation spoke to reporters about the matter and said the abrupt notices have left many vendors anxious about eviction and harassment from local authorities.
Legally, businesses must register for GST if they cross an annual turnover of ₹40 lakh for goods or ₹20 lakh for services. But critics argue that using UPI receipts alone to calculate turnover is flawed, with a former Karnataka tax official warning against such assumptions. Digital payments don’t always reflect income. Authorities can’t simply convert UPI credits into turnover figures, they must prove it with supporting evidence, he told the publication.
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Furthermore, a former GST officer said many digital payments could be misinterpreted. A lot of UPI entries could be personal — help from friends, family, or even informal loans. It’s not always business income, he explained, as quoted in the report.
Among political figures, BJP MLA S Suresh Kumar has spoken on the matter, vowing to raise the issue with Chief Minister Siddaramaiah, calling for protection of small-scale entrepreneurs.
Behind the crackdown lies a massive fiscal goal: Karnataka’s tax department is under pressure to hit a ₹1.2 lakh crore revenue target for 2025–26. With over ₹52,000 crore pledged for welfare schemes, the state is also facing mounting pressure from Congress legislators seeking additional funds for infrastructure, the report said.
