Bengaluru: Karnataka Traders Brew Revolt Over GST Notices
Symbolic Protest Unfolds
On July 23, 2025, small traders across Karnataka halted sales of tea, coffee, and milk in bakeries and condiment shops, donning black badges to protest GST notices issued by the Commercial Tax Department. The symbolic one-day agitation, offering only black tea and coffee, underscores their dissent against perceived unfair tax enforcement.
UPI-Driven Tax Crackdown
The Commercial Tax Department issued notices to over 14,000 traders whose digital transactions via UPI exceeded Rs 20 lakh for services or Rs 40 lakh for goods from FY 2021–22 to FY 2024–25. Small vendors, including vegetable sellers like Shankargouda Hadimani from Haveri, received demands up to Rs 29 lakh despite dealing in GST-exempt goods.
Traders’ Grievances
Vendors argue that the notices, based on cumulative UPI data, fail to account for exempt items like fresh vegetables and unbranded food. Labour activist Ravi Shetty Byndoor criticized the lack of prior education on tax obligations, with traders facing demands far exceeding their business valuations.
Shift to Cash Transactions
Fearing hefty tax liabilities, many vendors have abandoned UPI, displaying “No UPI, Only Cash” signs in markets like KR Market and Shivajinagar. This shift threatens India’s digital payment ecosystem, with sales dropping significantly for some traders.
Planned Statewide Bandh
Trader associations, led by the Karnataka State Karmika Parishat, have called for a statewide bandh on July 25, 2025, with a rally planned at Freedom Park, Bengaluru. The protest, supported by over 65,000 businesses, will escalate if the government does not withdraw the notices by July 24.
Government Response
Chief Minister Siddaramaiah has scheduled a meeting with trader representatives at 3 PM on July 23, 2025, to address the unrest. However, some groups, including Shetty’s organization, dismissed the invitation as a formality, refusing to attend unless small vendors are included.
Political Tensions
The protests have sparked a political row, with Deputy CM D.K. Shivakumar accusing the BJP of politicizing the issue, while the opposition blames the Congress-led state government for the crackdown. Union Minister Pralhad Joshi clarified that the notices stem from state authorities, not the central government.
Educational Initiatives Launched
The Karnataka government introduced the ‘Know GST’ campaign in Koramangala to educate traders, alongside a helpline (1800 425 6300) and workshops. Critics, including Advocate Shakuntala, argue that prior awareness could have prevented the unrest.
Economic Implications
A State Bank of India report warns that stringent GST enforcement via UPI monitoring risks pushing small businesses back to cash-based operations, undermining digital progress. The agitation could set a precedent for similar protests nationwide if unresolved.