‘No GST’ to ‘Know GST’: Bengaluru Traders Protest Amid UPI Tax Notice Row, Karnataka Govt Launches Outreach

Tensions are rising in Karnataka’s business circles as thousands of small traders and vendors in Bengaluru prepare to launch a three-day protest starting July 23, demanding the withdrawal of GST notices issued based on their UPI transactions. In response, the Karnataka government has kicked off a ‘Know GST’ awareness campaign aimed at clarifying tax compliance rules for small businesses.

The protest comes after more than 14,000 traders were flagged for suspected GST violations, with authorities using UPI payment data to identify those allegedly surpassing the ₹40 lakh turnover threshold for goods and ₹20 lakh for services. Some vendors reportedly received tax notices demanding payments up to ₹40 lakh, prompting many to stop accepting UPI payments altogether and shift to a cash-only model.

🔹 Protests, Black Badges, and Business Boycotts

Traders, led by the Karnataka Labour Council, have announced that they will boycott sales of milk and milk-based products on July 23–24 while donning black badges as a mark of dissent.

"The notices have come as a shocker. They include personal UPI transactions and are being arbitrarily applied," said Ravi Shetty Byndoor, President of the Labour Council.

A bandh has also been called at Freedom Park on July 25, with cab and auto drivers—who also rely on UPI payments—extending their support amid fears of similar tax scrutiny.

🔹 Government’s Response: Education Over Enforcement

In an attempt to ease tensions, Karnataka Chief Minister Siddaramaiah, who also holds the finance portfolio, has promised to raise the issue at the upcoming GST Council meeting. He also launched the ‘Know GST’ campaign, beginning with an outreach workshop in Koramangala, to help traders understand compliance obligations.

“We’re not demanding tax right now, only requesting transaction details,” said Vipul Bansal, Commissioner of Commercial Taxes.

The state has also launched a GST helpline (1800 425 6300) and scheduled statewide awareness workshops. Officials maintain that they are only enforcing existing GST norms laid down in 2017, and that misinformation is fuelling panic.

🔹 Traders Demand Relief, Say Clarifications Inadequate

Despite these efforts, the trader community remains deeply dissatisfied. Many allege harassment, claim they were given little time to respond, and say tax notices have been served for transactions dating back to 2021–22.

Some vendors insist they are being targeted despite staying below the taxable income limits. Others cite vague government responses and the lack of practical guidance in handling past records.

"High competition, low profits, and sudden GST enforcement make our businesses unsustainable," said a vendor attending the Koramangala workshop.

🔹 FKCCI and Trade Bodies Back Protest

The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has come out in support of the protest, urging the government to suspend tax enforcement until proper education and clarification is delivered.

Officials have asked traders to submit formal representations through industry associations for possible relief or reconsideration.

✅ Summary

• Protest Dates: July 23–25
• Reason: GST notices based on UPI transactions
• Government Response: ‘Know GST’ awareness campaign + workshops
• Traders' Concerns: Harassment, vague rules, lack of clarity, low profits
• Supporters: FKCCI, cab drivers, auto unions