More than 6,000 traders across Karnataka have received GST notices based on their UPI transaction data, causing confusion and concern.
In response, trader groups have called for a statewide bandh on July 25 and have urged others to stop using UPI.
Many small business owners feel caught off guard by the sudden action and fear financial penalties.
GST Officials Clarify: Notices Aren’t Final Demands
Meera Suresh Pandit, Joint Commissioner of Commercial Taxes, clarified that these notices are not final tax orders.
Traders can reply with the necessary documents. If the UPI transactions include exempted items or services—such as tuition fees or unbranded food—the notices will be withdrawn.
She also reminded traders that if service income crosses ₹20 lakh or goods turnover exceeds ₹40 lakh, GST registration becomes mandatory by law.
UPI Is Just a Trigger, Not the Full Evidence
Officials explained that UPI data is just one signal used by the Service Analysis Wing to detect possible tax evasion.
It helps flag traders who may be unregistered but still collecting GST or skipping taxes.
However, they emphasized that every trader will get a chance to explain their case, including personal hearings, before any final decision is made.
Traders and Activists Demand Better Clarity
Sajjanraj Mehta, a trade activist, criticized the lack of public awareness and clear communication from the government.
He said that UPI receipts often include both personal and business transactions, making it difficult to separate taxable income.
He added that many traders, especially in semi-urban areas, are now shifting back to cash-only dealings out of fear.
What Traders Are Demanding
Clear GST rules on UPI-related income
A clear line between taxable and exempt items
Awareness drives in local languages
A system to challenge wrong notices
A grace period before any penalties are imposed
Final Thoughts: Clarity Must Go With Compliance
While the GST department is working within the law, the current enforcement has caused confusion.
The situation shows a need for better education, clearer rules, and gradual enforcement.
Most traders are willing to follow GST rules—but not if it leads to stress, errors, or sudden financial burden.
