Overzeal Of GST Authorities Driving Vendors Against UPI Payment Mode

Bengaluru, Jul 23 (KNN) In Bengaluru, a growing number of small shopkeepers have removed UPI payment options such as PhonePe, Paytm, and Google Pay QR codes from their stores, reverting exclusively to cash transactions.

This shift comes amid widespread concern that digital payments via UPI are making their incomes more transparent, potentially exposing them to higher scrutiny from GST authorities.

Many vendors believe that UPI transaction records, visible to tax officials, could become a tool for audits and demands for additional tax payments.

Consequently, to conceal sales and minimise tax risks, they are withdrawing digital payment facilities.

This movement highlights deeper anxieties about taxation among small business operators, particularly in the informal sector of India’s economy.

These merchants often lack formal bookkeeping and may not have registered under the Goods and Services Tax (GST) regime.

Digital trails, they argue, could lead to unwelcome attention from tax authorities, prompting penalties or retrospective liabilities. Cash payments, by contrast, are harder to trace, offering greater financial opacity.

This phenomenon is not limited to Bengaluru alone. Similar trends have emerged in other Indian cities, where small vendors perceive digital transactions as potential liabilities rather than conveniences.

The UPI system, widely promoted by the government to enhance financial inclusion and reduce black-market dealings, appears to be facing resistance from those who fear it may backfire on their livelihoods.

Economists suggest that this could weaken the broader goals of India’s digitization drive, especially if small vendors — a key segment of the informal economy — increasingly shy away from digital platforms.

Addressing these tax-related fears and simplifying compliance for small merchants could be essential to restoring their confidence in cashless payments.

(KNN Bureau)