Commercial Taxes Dept. Sends GST Notices to 7,000 Unregistered Small Vendors Across Karnataka

Commercial Taxes Dept. Sends GST Notices to 7,000 Unregistered Small Vendors Across Karnataka

The Commercial Taxes department has shared a notices to approx. 7,000 unregistered small vendors across Karnataka, including trading and exempted goods like milk, vegetables and unbranded food items. No tax demand has been raised however the vendors have been asked to acquire GST registration.

A senior officer said the notices were meant to ensure registration, as the department could not verify if the goods or services sold were exempt. he also added that Vendors should submit proof of exemption.

The department identify the unregistered traders based on UPI transaction data, also by identifying of digital inflows exceeding Rs 40 lakh in goods and Rs 20 lakh in services.

One GST officer issued the notice under Section 63 of the GST Act. This Act states “Where a taxable person fails to obtain registration even though liable to do so the proper officer may proceed to assess the tax liability and issue an assessment order within five years.”

The GST notice have made vendors anxious and worry. One meat seller from Bengaluru City received a Rs 91 lakh notice even after claiming exemption and never having registered under GST. Many other vendors avoid GST registration, citing exemption or fear of high tax liabilities. while some have stopped accepting UPI payments, even at the cost of losing business.

In reply, Chief Minister Siddaramaiah has stated that notices would be withdrawn if vendors prove they deal only in exempted goods. He also said arrears would be waived for those who register now and comply with the Act.

A CA, said that dropping UPI would hurt both businesses and the broader economy. he also added “Taxpaying is a chain. If someone breaks away from that, the burden falls on the person just before the break.”