Concerns Over GST Enforcement Impact on Small Businesses

An SBI report has raised alarms about the potential negative effects of aggressive tax enforcement on small businesses, particularly those utilizing UPI payments. The report highlights a case from Karnataka where small traders in Bengaluru faced disproportionately high tax notices based on their digital transaction footprints.

Call for Balanced Tax Enforcement

The report urges a more balanced approach to tax enforcement, emphasizing the need for sensitivity to avoid pushing small businesses back into the informal cash-based economy. It warns that overly aggressive scrutiny could undermine the GST's goals of formalization and inclusivity.

GST's Future Depends on Inclusivity

According to the SBI, the long-term success of GST hinges on its ability to empower all stakeholders, especially small traders, rather than penalizing them. The foundation laid by GST for greater accountability and revenue generation must not be compromised by enforcement practices that discourage participation in the formal economy.