Bengaluru Traders Refuse UPI Payments; Govt Clarifies GST Applies to All Modes
19 Jul, 2025 16:54 IST|Sakshi Post
Amid growing reports of vendors in Karnataka refusing digital payments, the state’s commercial taxes department has clarified that Goods and Services Tax (GST) is applicable irrespective of how the payment is made — be it cash, UPI, card, or bank transfer.
Several vendors in Bengaluru recently put up signs saying “No UPI, Only Cash”, claiming that accepting online payments had triggered GST notices from the department. In response, officials have emphasized that GST liability is based on turnover — not the mode of payment.
In a detailed statement, the commercial taxes department explained that notices were issued only to vendors whose annual UPI transactions exceeded the GST registration threshold — ₹20 lakh for services and ₹40 lakh for goods.
Officials urged vendors who received notices to submit proper documents to clarify their turnover. After verification, GST will be charged only on taxable income, excluding exempted goods or services.
As per data, Karnataka has 98,915 registered traders under the composition scheme, who pay taxes as per existing norms. Of these, less than 10% received GST notices, mostly due to digital payment data showing high turnover since FY 2021–22.
Officials also clarified that the notices were part of routine compliance checks, not a crackdown on digital payments. Traders exceeding the threshold are legally required to register for GST and pay taxes accordingly.
To ease confusion, commercial tax officers have been instructed to raise awareness among traders about GST rules and registration criteria.
This renewed focus on compliance comes as the Karnataka government targets ₹1.2 lakh crore in tax revenue for the financial year 2025–26.
