Vegetable Vendor Shocked in Haveri; Receives ₹29 Lakh GST Notice Over UPI Transactions
Vegetable Vendor Shocked in Haveri; Receives ₹29 Lakh GST Notice Over UPI Transactions
Vendor says he files income tax regularly and calls demand unaffordable
A vegetable vendor in Haveri, Karnataka, has been slapped with a tax demand of ₹29 lakh by the Goods and Services Tax (GST) department, triggering widespread concern over the implications of digital transactions for small businesses.
Shankargouda Hadimani, who has been running a modest vegetable shop near the Municipal High School grounds for the past four years, was served the notice after officials flagged UPI and e-wallet transactions amounting to ₹1.63 crore over the period.
“You have done transactions worth ₹1.63 crore in the last four years, for which you have to pay GST of ₹29 lakh,” the notice stated.
The vendor, who is not registered under GST, said he was stunned by the demand and has since stopped accepting digital payments altogether. “I procure vegetables directly from farmers and sell them at my small shop. Nowadays, customers prefer UPI payments. I file income tax returns every year and have the records. But now I’m being told to pay ₹29 lakh in GST, how can I afford that?” he said.
According to Hadimani, most of the transactions were retail sales to individual consumers, not taxable supplies to businesses. “This is my daily earning, not large-scale business turnover,” he added.
The case has sparked wider concerns as similar notices are reportedly being issued to other small vendors. Experts say while digital payments improve transparency, the sudden enforcement without context or awareness could severely impact unregistered and low-margin retailers.
Tax consultants suggest that many small vendors may be unaware of the GST turnover thresholds and the legal obligations attached to digital transactions. Under GST norms, businesses with annual turnover above ₹40 lakh (₹20 lakh in some states) are required to register and collect tax. However, retail cash flows processed via UPI may appear large even when margins remain razor thin.
The vendor has appealed to authorities for reconsideration, citing his low profit margins, compliance with income tax filing, and lack of GST registration awareness. No official response has been issued by the GST department yet.
