Small traders and vendors in Bengaluru have concluded their protest against recent Goods and Services Tax (GST) notices after a meeting with Chief Minister Siddaramaiah on Thursday. Consequently, the Bengaluru bandh slated for July 25 is no longer taking place. All services across the city will be operational, which includes banks, schools, colleges, hospitals and shops and will not be disrupted.
The protest began when Karnataka’s commercial tax department sent GST notices to traders whose annual transactions through UPI exceeded ₹40 lakh. Many small vendors, including tea stalls, bakeries and chaat shops, feared the possibility of retrospective taxing on their business and stopped accepting digital payments, returning back to cash-only. This led to rising anxiety across Bengaluru’s unorganised sector, with fears that innocent or misclassified personal or loan transactions might be wrongly taxed.
During the discussion with CM Siddaramaiah, trader representatives highlighted the confusion surrounding GST laws, particularly their application on digital transactions not meant for business, such as personal transfers or loan repayments. They sought clear communication channels with tax officials, asking for the government to set up a dedicated helpline, conduct awareness campaigns on GST compliance, and consider a one-time waiver for past dues.
In response, Chief Minister Siddaramaiah clarified that the notices were not blanket orders, but were sent only to traders whose digital UPI transactions had exceeded ₹40 lakh an indicator requiring GST registration under the law. He assured that those agreeing to register and pay GST moving forward would not be burdened with old tax dues. This reassurance helped cool tensions.
CM also clarified that vendors operating solely in GST-exempt articles like milk, fruits, vegetables and meat will not receive tax assessments but that all entities in the GST regime should follow the existing guidelines and register where they are required to, in order to avoid similar issues in the future.
The important requests of traders regarding the waiver, communication, and education in GST will soon be settled and suitably addressed. For now, Bengaluru’s business community can expect to operate normally on July 25 with no interruptions or shutdowns.
This outcome delivers assurance to thousands of vendors who were uncertain and scared. This incident is also an important milestone for conversation between the government and ground-level businesses, as this relationship has been digitally paid for by the digital payment methods that have altered a portion of the ecosystem.
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