Tax dept advises Bengaluru's small scale vendors not to shun UPI over GST fears: Report

The tax department clarified that GST notices are based on all payment types, not just UPI, after Bengaluru's small businesses shifted to cash payments.

Published on: Jul 18, 2025, 10:00:57 IST

By HT News Desk, Bengaluru

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Days after Bengaluru's small scale businesses, street vendors, unregistered markets and corner shops were seen shifting from Unified Payments Interface (UPI) to cash payments over fears of heavy taxes, the commercial tax department has stepped forward with a clarification that traders should not stop accepting payments via UPI, news agency PTI reported.

Bengaluru's small businesses are urged not to abandon UPI payments due to GST fears. (iStockphoto) (MINT_PRINT)

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The department had earlier announced that businesses earning more than ₹40 lakh annually from goods or ₹20 lakh from services are required to register under the Goods and Services Tax (GST) system. Several vendors have since then reportedly received GST notices to pay lakhs in tax.

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Following this, small business owners have started using hand-written signs and printed notices stating “No UPI, only cash” at their roadside stalls, food carts and corner shops.

In this light, the Additional Commissioner of Commercial Taxes department on Thursday issued a public statement to address the confusion over the notices, allegedly based on UPI transaction data.

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Officials explained that GST notices are not based solely on UPI activity, but rather take into account all types of payments, including those made via point-of-sale machines, bank transfers, cash, and digital platforms. They emphasized that avoiding UPI does not exempt traders from GST obligations, according to the PTI report.

"The GST is applicable on the consideration received for the supplies in any form and UPI is only a method of receiving such consideration. The department will take suitable action to collect the applicable tax under the GST Act from the traders who have received consideration in any form," a press release from the department said.

(With inputs from PTI)

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HT News Desk
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