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Karnataka small businesses rally against GST demands on UPI transactions after tax notices spark anxiety: Report
Small business owners in Karnataka are alarmed by GST notices issued for exceeding ₹40 lakh in UPI payments.
Small-scale business owners and market vendors across Karnataka are expressing alarm after being issued Goods and Services Tax (GST) notices by state tax authorities. The concerns have been triggered by a recent tax department directive, which sent notices to traders whose total UPI (Unified Payments Interface) payments surpassed ₹40 lakh in a single year. Affected vendors are urging the state government to cancel these notices and reconsider enforcement policies for small businesses and traders, news agency ANI reported.
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Representing the Karnataka Pradesh Street Vendors Association, Abhilash Shetty highlighted the precarious nature of small vendors’ profitability. He pointed out that typical margins barely reach 10 per cent, making it impossible for these businesses to cope with the combined weight of tax and penalties, which, he claimed, can amount to half their total turnover. Shetty called on state officials to intervene, emphasizing that without relief, many vendors may be unable to continue operating, as quoted by ANI.
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Adding to the outcry, the association’s legal counsel, Advocate Shakuntala, also spoke to reporters about the matter and criticized governmental authorities for not adequately informing new business registrants about their tax liabilities. She questioned why educational efforts were not made during the registration process, arguing that a lack of guidance had left many vendors unprepared for tax regulatory compliances.
A vegetable seller in Haveri shared his ordeal after being slapped with a tax notice for ₹29 lakh by Bengaluru tax officials. He explained he had not registered for GST, believing that fruits and vegetables were exempt from such tax rules. "The officials have told me that if it is proven that I have done so much business in vegetables, the notice will be withdrawn…" he said in the report.
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Political slugfest ensues in Karnataka
The opposition BJP seized upon the situation, attacking the Siddaramaiah-led Congress government in the state for what they described as an indiscriminate crackdown against small traders.
Karnataka Deputy Chief Minister DK Shivakumar addressed the allegations and said the BJP was trying to shift the blame of GST notices to small traders on the state government.
“The BJP government at the Centre had fixed a turnover limit of ₹40 lakh for the GST registration and had also intimated the state governments to follow it. The GST office has issued notices to approximately 14,000 traders, including vendors of tender coconuts, flowers, and vegetables. Our leader, Rahul Gandhi, had opposed the GST in the past. The BJP must withdraw the GST notices issued to small traders. The CM will discuss with the officials and take necessary steps on the GST notices issued,” he said, as quoted by the agency.
(With inputs from ANI)
