Haveri: A small vegetable vendor from Haveri, Karnataka, has been left stunned after receiving a ₹29 lakh GST notice for UPI transactions made over four years. Shankargouda Hadimani, who runs a small vegetable stall near the Municipal High School grounds, was told by tax authorities that he owed the sum based on digital payments amounting to ₹1.63 crore.
Shankargouda, who has been selling vegetables directly sourced from farmers, insists he only sells fresh produce items which are exempted from GST. He says digital payments became common as customers moved away from cash and that he has always filed income tax returns and maintained records.
According to GST rules, fresh and unprocessed vegetables are not taxable. But Karnataka’s GST department has begun monitoring digital transactions and issued warnings that any trader whose turnover exceeds the GST registration threshold must register and pay applicable taxes.
Following the department’s July 12 announcement, many small traders have reportedly stopped accepting UPI, fearing similar notices. On July 17, the department clarified that tax obligations apply regardless of whether payments are received via UPI or cash and warned of action against those trying to conceal income.
