Using UPI data, govt cracks down on unregistered traders to boost GST revenue | Bengaluru News

Bengaluru: In a significant move to increase tax collections, the govt has begun using Unified Payments Interface (UPI) data to identify traders, especially those accepting payments via QR codes, who have evaded goods and services tax (GST) registration.After analysing UPI transactions, the commercial taxes department recently issued notices to some 14,000 traders. Officials say these individuals have crossed the mandatory GST registration thresholds but failed to register. Under GST rules, traders selling goods with an annual turnover above Rs 40 lakh or offering services above Rs 20 lakh are required to register. Those with turnover below Rs 1.5 crore can opt for the composite scheme, paying 1% tax without availing input tax credit.Vipul Bansal, commissioner, commercial taxes, said the crackdown is not just about revenue but fairness.“While the drive would help us ramp up tax revenue, the main objective is to get those who evade taxes to pay up. They too should abide by the law. It is also fair to those who are already paying tax,” Bansal said.Currently, the state has about 10.3 lakh traders registered under GST. Officials estimate that at least another one lakh will be added through this enforcement drive. This move is seen as critical to meeting the govt’s ambitious commercial tax target of Rs 1.2 lakh crore this fiscal. So far, only Rs 26,241 crore has been collected, indicating a 13% shortfall. Taxing unregistered businesses could yield an additional Rs 10,000 crore.However, the enforcement has caused concern among small business owners, particularly grocery stores, bakeries, and vegetable vendors. Many have reported being asked to pay tax arrears dating back to 2021, with liabilities ranging from Rs 40 lakh to Rs 50 lakh — amounts they say are unmanageable in one go.“The govt’s move is welcome and its intent unquestionable,” said trade activist Sajjan Raj Mehta. “But it should not lead to harassment from tax officials as most traders tracked through UPI are small businessmen. The govt should be considerate to them.”Traders argue that not all UPI transactions reflect business income, citing personal payments and fund transfers. However, officials say only traders receiving over Rs 40 lakh through UPI were targeted, and that these digital payments likely underestimate total turnover, which could include cash and card sales as well.BT Manohar, a member of Karnataka State GST Advisory Council, emphasised the need for fairness. “The drive has spread awareness among traders about GST rules and there is no denying that those liable must pay tax,” he said. “If there are personal payments through UPI other than business transactions, then traders should be given the opportunity to present their case.”The govt has clarified that hawkers and sales of exempted goods like bread will remain outside the GST ambit. Only sales of taxable goods, including items attracting 5% GST, including condiments will be scrutinised, besides those falling under the higher slabs. Bansal added: “The govt is ready to give traders a fair hearing and help them if their cases are genuine. The law allows traders to pay tax arrears in instalments and we will provide all possible help and support to them.”