Small traders across Karnataka, incensed by nearly 6,000 GST demand notices based on UPI transaction data, have called for a statewide strike on July 25, with many boycotting digital payments in favor of cash. The Karnataka Commercial Taxes Department, using UPI data from 2021-22 to 2024-25, targeted traders with annual turnovers exceeding Rs 40 lakh for goods or Rs 20 lakh for services, mandating GST registration under the 2017 GST Act. Notices, some demanding up to Rs 40 lakh, have sparked protests, with traders halting milk-based product sales on July 23 and 24 as a symbolic dissent, wearing black badges in Bengaluru markets.

Joint Commissioner Meera Suresh Pandit clarified that the notices are not final tax demands but requests for traders to verify their turnover and compliance. “If the turnover is from exempt goods like vegetables or tuition fees, registration isn’t required, and notices will be dropped after a convincing reply,” Pandit told PTI, emphasizing helplines (1800 425 6300) and the “Know GST” campaign launched on July 21 in Koramangala to educate traders. She stressed that UPI is just one indicator, as cash and other payment modes also count toward turnover, and urged traders to respond with documentation rather than striking.

However, trade activist Sajjanraj Mehta criticized the sudden enforcement, noting that UPI data often includes personal transactions, leading to inflated turnover estimates. “A vegetable vendor in Haveri got a Rs 29 lakh notice despite selling exempt goods,” Mehta said, citing confusion over lack of prior education. The Karnataka Karmika Parishat, led by Ravi Shetty Byndoor, alleges harassment, claiming notices demand arrears back to 2021.

The Federation of Karnataka Chambers of Commerce and Industry supports the strike, calling the approach “arbitrary.” Chief Minister Siddaramaiah has promised to raise the issue at the GST Council meeting, as traders demand clearer guidelines and exemption clarity.

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