Small Traders Get GST Notices Demanding Lakhs Of Rupees In Bengaluru

Bengaluru: Hundreds of small traders and shopkeepers in Bengaluru have been hit with unexpected GST notices demanding payment of lakhs of rupees.

Many are questioning the sudden crackdown and fear of losing their livelihood. Raghavendra Shetty, who runs a small juice and confectionery shop in Rajajinagar has received a GST notice for Rs 65.45 lakh, including interest, for the years 2021–22 to 2024–25. The notice warns if the amount is not paid by July 21, his bank accounts will be frozen.

“Mine is a small shop. I don’t earn enough to even run my household. How can I pay Rs 65 lakh? Even if I sell everything I own, I won’t be able to arrange the amount,” said Raghavendra, who is now making rounds of local GST offices seeking help.

Like Raghavendra, many owners of small bakeries, pan shops, tea stalls, grocery and condiments stores across Bengaluru have received similar notices. The tax demands range from Rs 20 lakh to Rs 75 lakh, based on UPI transaction data collected by the Commercial Tax Department.

Nagraj Shetty, member of the Karmika Parishat, criticised the move, stating his brother also received a Rs 50 lakh notice despite having sold his bakery three years ago. “Why didn’t the government act during the last four years? Why all of a sudden are they imposing tax in lakhs?” Shetty questioned.

Calling the notices an injustice to small businesses, he said, “We take loans, work hard, and live hand-to-mouth. After paying tax, we earn barely anything. These kinds of notices are like being kicked in the stomach.”

Vipul Bansal, Commissioner of the Commercial Tax Department, Karnataka, clarified that the notices are not final demands. “As per Section 22 of the GST Act, businesses with annual turnover of above Rs 40 lakh (Rs 20 lakh for service providers) must register for GST. These notices are based on transaction records from UPI platforms,” he said.

He added that shopkeepers should visit their local GST offices to submit their transaction details. “There are many tax-exempt items like bread. If shopkeepers provide records, tax will be recalculated excluding exempt items,” he explained.

The Commissioner also mentioned that small traders with turnover of less than Rs 1.5 crore can opt for a composition scheme, under which they would only need to pay 1 per cent of their turnover as tax in the future. Despite government assurances, shopkeepers remain anxious and confused. The Karmika Parishat is preparing to submit a memorandum to Chief Minister Siddaramaiah seeking urgent relief.

“If this issue is not resolved soon, we will launch protests across the state,” said Nagraj.

Also Read

Gujarat Shows Strong Growth In GST Revenue And Compliance, Reports Rs, 1,36,748 Crore GST Collection