Karnataka GST Crackdown: Vegetable Vendor Slapped With ₹29 Lakh Notice

A vegetable vendor in Karnataka’s Haveri district received the shock of his life when he was served a GST (Goods and Services Tax) notice demanding payment of ₹29 lakh.

The vendor, identified as Shankargouda Hadimani, runs a small shop near the Municipal High School grounds and has been selling vegetables for the past four years.

Shankargouda explained that since many customers no longer carry cash, they often pay via UPI or other digital wallets. According to the notice, he had made transactions worth ₹1.63 crore over four years and owed ₹29 lakh in GST.

He pointed out that he purchases fresh vegetables directly from farmers and sells them at his shop. He also said he has been filing Income Tax Returns every year and has maintained all necessary records. Now, Shankargouda is in a dilemma about how to pay such a huge amount.

It is worth noting that fresh and chilled vegetables are exempt from GST. However, the Karnataka government has reportedly been cracking down on vendors as part of its push to meet the ₹1.2 lakh crore tax revenue target for the 2025–26 financial year.

In recent days, reports have emerged that several vendors across Karnataka, particularly in Bengaluru, have started refusing digital payments. Many have put up signs reading, “No UPI, Only Cash.”

In response, the Karnataka government clarified that GST is applicable regardless of the payment mode — whether cash, UPI, card, or bank transfer.

Officials from the Commercial Taxes Department emphasized that GST liability is determined by turnover, not by how the payment is received.

They also explained that notices were sent only to vendors whose annual UPI transactions exceeded the GST registration threshold — ₹20 lakh for services and ₹40 lakh for goods.

Authorities urged vendors who have received notices to submit proper documentation to verify their actual turnover. After verification, GST will be levied only on taxable income, excluding exempted goods or services.