GST News: Big action regarding GST, notice issued to 13 thousand roadside shopkeepers

The commercial tax department of a state has issued show cause notices to 13,000 small traders for not paying GST using digital payment data. This action was taken by combining UPI transaction data and GST registration of apps like PhonePe, Google Pay, Paytm.

The Commercial Tax Department of the state of Karnataka has initiated a unique action based on digital transactions. According to CNBC-TV18 sources, the department has issued “show cause notices” to about 13,000 small taxpayers for not paying GST. The list of these taxpayers includes roadside hawkers and small businessmen.

This action has been taken after a six-month investigation of Unified Payments Interface (UPI) transactions from the financial year 2022 to 2025. Sources said that the department examined the transaction data of major UPI apps like PhonePe, Google Pay, Paytm, BHIM and matched it with GST registration records.

Investigations revealed that many small traders, who were receiving large UPI payments, were not registered under GST. Whereas their annual income was more than the limit of Rs 20 lakh for services and Rs 40 lakh for goods.

What was the effect of this action?

A senior government official told CNBC-TV18 on the condition of anonymity, “This step will have a big impact. Karnataka has shown the way, now other states can also adopt this model. But it also has a negative side – due to this small traders can leave digital payments and return to cash and this can reduce trust in the tax system.”

Threat to Digital India mission

Another senior official said, “This action can harm the Digital India mission. This mission emphasizes on cashless transactions and formalization of the economy.” Locals in Bengaluru say that many street vendors and small entrepreneurs, who have not yet received notices, are stopping taking UPI payments out of fear.

Impact on unorganized sector

Officials say that the aim of this initiative is to bring informal economic activities under the tax net. But it may have a chilling effect on digital payments, especially in the unorganized sector.

Challenges of GST

The GST system introduced in 2017 was aimed at simplifying the tax system, but critics say small businesses are suffering due to repeated filing, complex processes and lack of digital knowledge.

A Bangalore-based tax consultant said, “Digitization is a powerful compliance tool, but if it is not accompanied by simplification, it can penalize the small traders who are being tried to formalize.”



from informalnewz https://ift.tt/jic3uFb

Post a Comment

0 Comments