Bengaluru:
The Karnataka unit of the BJP has launched a blistering attack on Chief Minister Siddaramaiah over the issuance of GST notices to small traders and street vendors across the state, calling for immediate withdrawal of these demands and accusing the state government of undermining the Digital India initiative.
BJP State President and MLA B. Y. Vijayendra addressed the press on Wednesday, claiming that the commercial tax department had issued notices based on third-party data without verifying facts. “The issuance of notices to small and middle-class traders … has stirred a debate across the state. Traders are under immense pressure and deeply concerned,” he said.
Vijayendra further alleged that the notices were a political tool to fill the state’s empty coffers and sabotage the use of digital payments. “It is deplorable … forcing small traders, retail merchants … to adopt ‘cash only policy’ instead of UPI,” he added. Pointing out the financial burden on traders, he urged the government to recall Siddaramaiah’s own remarks about Karnataka’s strong GST collection before this enforcement drive.
The row erupted after the commercial tax department used UPI transaction data to identify approximately 14,000 traders whose digital receipts exceeded thresholds, ₹40 lakh for goods or ₹20 lakh for services, resulting in notices demanding tax arrears from financial years 2021–22 to 2024–25.
One dramatic example emerged from Haveri district, where vegetable vendor Shankargouda Hadimani was served a ₹29 lakh tax demand after UPI transactions of ₹1.63 crore, despite vegetables being GST-exempt. “I don’t know how I can arrange such a huge amount,” he said.
Across Bengaluru and other cities, protests have intensified. Thousands of traders wore black badges and suspended sales of milk, tea and coffee in bakeries as a symbolic show of dissent. Many vendors now refuse UPI transactions, placing prominent “No UPI” signs, expressing fear of further tax notices.
Responding to the backlash, CM Siddaramaiah has called a meeting at his official residence, Cauvery Niwas, on Wednesday at 3 pm with representatives from trade bodies and department officials, including the principal secretary for finance and commercial taxes commissioner . The meeting aims to find a solution and discuss declaring the notices as data collection rather than final tax demands.
The BJP extended its full support to the traders’ protest and demanded all notices be retracted. “The state must immediately stop issuing these notices, and the ones already sent must be withdrawn,” Mr Vijayendra asserted.
Deputy Chief Minister D. K. Shivakumar defended the government, stating the tax office acted within its constitutional mandate, and blamed the Centre’s GST thresholds. He also described the BJP’s accusations as attempts to shift attention.
The protest shows no signs of abating, with trade bodies planning a three-day agitation until Friday, 25 July, culminating in a potential shutdown at Bengaluru’s Freedom Park. Street vendors have warned of escalating demonstrations unless the notices are revoked.
Meanwhile, larger associations such as the Federation of Karnataka Chambers of Commerce and Industry have backed the traders, calling the current policy unfair and urging an empathetic approach.
As the scheduled meeting progresses and opposition pressure mounts, all eyes are on whether the Siddaramaiah government will choose to mollify its critics by withdrawing the notices or maintain a hardline stance. The unfolding developments will test the government’s capacity to balance tax enforcement with preserving the livelihoods of small-scale traders.
