The tax agency has clarified its position after small retailers in Bengaluru are shunning UPI payments because they are worried about GST. Officials emphasized that all payment methods, including cash and digital ones, are taken into account when issuing GST notices, so they are not only dependent on UPI transactions.
Why Bengaluru Shops Are Refusing UPI Payments – GST Officials Step In
Bengaluru: The tax department has provided clarification on the issue after small sellers in Bengaluru chose not to accept UPI payments due to concerns over GST. According to news agency PTI, the commercial tax department has released a statement encouraging traders to keep using UPI.
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Officials explained that UPI transactions alone are not the basis for issuing GST notifications. Rather, they take into account every type of payment, including cash, digital platforms, bank transfers, and point-of-sale devices. According to the PTI article, they emphasized that dealers are still liable for GST even if they choose not to use UPI.
“GST applies to all forms of payment received for supplies, and UPI is only a means of payment for such payments. According to a government news statement, “The department will take appropriate action to collect the applicable tax under the GST Act from the traders who have received consideration in any form.”
Prior to the tax department’s announcement that companies making more than Rs 40 lakh in commodities or Rs 20 lakh in services yearly must register under the commodities and Services Tax (GST) system, Bengaluru sellers posted signs advertising “No UPI, Only Cash” at their establishments.
There is mounting pressure on Karnataka’s tax officials to reach the ambitious revenue collection goal of Rs 1.20 lakh crore for 2025–2026. In addition to addressing the growing calls from Congress MLAs for more infrastructure investment around the state, Chief Minister Siddaramaiah is balancing the difficulty of financing social promises of Rs 52,000 crore.
