• Source:JND
Add as a preferred

Bengaluru is replacing QR codes for cash, as more small vendors ditch digital payments under tax pressure. Across the city, shops are putting up stickers, printouts, or handwritten signs reading, “No UPI, only cash.” Vendors who once welcomed UPI now insist on cash transactions to avoid scrutiny from tax authorities.

“I do a business of about Rs 3,000 a day and live on the small profit I make. I can’t accept payment by UPI anymore,” Shankar, a shopkeeper in Horamavu said, according to the TOI report. 

ALSO READ: 'Drove Just To Give Keys Back': Bengaluru Man Praises 'Honest' Auto Driver In Reddit Post; Netizens React

Bengaluru Vendors Explains Why They Want To Switch To Cash 

According to vendors, lawyers, and accountants, thousands of unregistered small businesses in Bengaluru, including street food stalls, pushcarts, and corner shops, have been served GST notices, with some facing demands amounting to several lakhs of rupees. Advocate Vinay K Sreenivasa, joint secretary of the Federation of Bengaluru Street Vendors Associations, said many vendors fear harassment by GST officials and potential eviction by civic authorities, pushing them to opt for cash payments instead.

Under the current GST rules, businesses selling goods must register and pay GST if their annual turnover exceeds Rs 40 lakh, while the threshold for service providers is Rs 20 lakh. The commercial taxes department clarified that notices were issued only where UPI transaction data since 2021-22 suggested turnover beyond the registration threshold.

However, H.D. Arun Kumar, former Additional Commissioner of Commercial Taxes in Karnataka, said that GST authorities cannot arbitrarily cite random figures as a business's turnover. “Under the GST laws, the burden of proof is on officers. They must establish it before arriving at a tax demand, unlike in money laundering cases,” he said, according to the TOI report. 

Opposition BJP MLA S Suresh Kumar said he intends to write to Chief Minister Siddaramaiah, urging his intervention. A former GST field official also noted that not all UPI credits necessarily represent business income.

“Some of it would be informal loans or transfers from family and friends,” he said. “Bengaluru may emerge as a test case. If the GST authorities can net a good chunk of revenue by tapping unregistered vendors, other states too will take the cue as every state is desperate for funds,” said chartered accountant Sreenivasan Ramakrishnan of Sreeni & Associates.

ALSO READ: Bengaluru Power Cut From July 17-24: BESCOM Announces Week-Long Shutdown; Check List Of Affected Areas

Karnataka’s tax officials are under pressure to meet a revenue collection target of Rs 1.20 lakh crore for 2025–26. Meanwhile, Chief Minister Siddaramaiah faces the dual challenge of financing welfare guarantees worth Rs 52,000 crore and addressing demands from Congress MLAs for increased infrastructure funding.