Bengaluru Pushes Back: 'No UPI, Only Cash' Movement
Bengaluru vendors are rejecting UPI due to GST fears, showing rising mistrust in India’s digital payment system.
In Bengaluru, a surprising thing is happening. Many small shopkeepers and street vendors have stopped accepting UPI and digital payments. They have removed QR codes and put up boards saying, “No UPI, only cash.”
Why is this happening? Since 2021-22, the tax department checked UPI transactions and found that around 14,000 traders in Bengaluru had received more money through UPI than allowed under GST rules. According to the law, if someone earns more than ?40 lakh from goods or ?20 lakh from services, they must register for GST. The tax department sent notices to over 5,500 traders, and some even received tax demands of ?2 crore on one PAN card.
Small shopkeepers and vendors are very upset. They say their daily sales are low, around ?3,000 per day, and the tax notices are confusing personal transactions with business money. Due to fear of heavy fines and harassment, many vendors have decided to stop using UPI and prefer only cash payments now.
The Karnataka Commercial Taxes Department has said that GST must be paid whether a person uses cash or UPI. Chief Minister Siddaramaiah has also promised to protect small shopkeepers and reduce the pressure from sudden GST actions.
This issue has caused big protests in Bengaluru. Vendors have started a three-day protest. On 23rd July, they stopped selling milk. On 24th July, they boycotted gutka and cigarette sales. On 25th July, bakeries, condiment shops, and petty stores remained fully closed. The final bandh on 25th July showed how angry and scared small vendors have become.
People say that the government is not explaining GST rules properly and is creating fear among small traders. Bengaluru, which was famous for digital payments, is now seeing people go back to using cash.
Experts also warn that the same thing can happen in Mumbai and other cities because many states need to collect more tax money. Karnataka alone has a target of ?1.20 lakh crore in 2025–26 to support different welfare schemes.
In simple words, many small shopkeepers in Bengaluru are leaving digital payments and using cash to avoid GST problems. Now, the government has to work on building trust and helping small traders instead of scaring them.
