GST Compliance for Bengaluru Vendors

The Karnataka commercial taxes department has issued a clarification that all small vendors in Bengaluru must continue to pay Goods and Services Tax (GST) at the applicable rates, irrespective of whether payments are made digitally or in cash.

Understanding the Notice

This announcement comes in response to media reports suggesting some traders had ceased accepting UPI payments following GST notices sent to unregistered businesses. These notices targeted those whose annual UPI transactions exceeded Rs 20 lakh for services or Rs 40 lakh for goods, the threshold for mandatory GST registration.

Department's Assurance

Officials have encouraged affected traders to submit the necessary documents for verification, assuring that GST will be levied only on taxable turnover after exempt goods and services are excluded. The department is committed to facilitating smooth registration for those currently outside the GST net.

Composition Scheme Details

As of now, 98,915 traders have registered under the composition scheme, paying taxes accordingly. Traders with an annual turnover below Rs 1.5 crore can opt for this scheme, paying a combined 1% tax under SGST and CGST, provided they are properly registered under GST.

Revenue Collection Goals

Karnataka’s tax officials are under pressure to meet a revenue collection target of Rs 1.20 lakh crore for the 2025–26 financial year, amidst challenges of financing welfare guarantees and infrastructure projects.