A ₹29 lakh GST notification was received by a vegetable vendor in Haveri, Karnataka. The GST department sent this warning because Shankargouda, the vendor, has made ₹1.63 crore in UPI transactions over the last four years.
This notification was issued as a result of GST officers becoming suspicious about repeated digital transactions. Due to anxiety, small business owners in places like Bengaluru and Mysuru are prioritizing cash transactions over UPI in the wake of these instances.
“Every year, I file an income tax return,” the vegetable vendor stated.
For the past four years, Haveri resident Shankargouda has operated a vegetable stand next to the municipal high school. Digital wallets and UPI account for the majority of his income. According to Shankargouda, I purchase and resell fresh vegetables from farmers that are GST-exempt. Every year, I submit income tax returns. How am I going to pay this huge tax?
GST-free sales of vegetables bought from farmers
ClearTax states that if vendors buy fresh, unprocessed veggies straight from farmers and resell them in their establishments, they are exempt from GST. Officials occasionally issue notifications that treat all digital transactions as corporate turnover.
Small traders’ fear of notices.
Thousands of small business owners in Karnataka, including modest businesses, roadside food stands, and street vendors, are receiving these GST notices. The explanation is that UPI transactions are now being monitored by the GST department. If a goods dealer’s or service provider’s annual revenue exceeds 40 lakh rupees or 20 lakh rupees, GST registration is necessary. Many traders are unintentionally going above this limit, therefore notices are being sent out.
Siddaramaiah said – will bring up the matter with the central government.
Siddaramaiah, the chief minister of Karnataka, has stated that he will bring up this matter with the GST Council and the federal government. He gave traders his word that there would be no harassment of small traders.
Instead of using UPI, traders are switching back to cash.
Shopkeepers are deleting QR codes and posting signs that only accept cash in numerous Karnataka cities. Auto drivers, PG operators, and hotel owners in Mysore are also giving up on UPI. “It is challenging to maintain a record of every transaction,” remarked one hotel owner. In order to avoid GST notices, cash is preferable. The GST department has issued a warning that all earnings, whether made through UPI or cash, must be subject to tax.
