Bengaluru's Street Vendors Go Cash-Only Amid GST Crackdown

In a bid to evade the long arm of the Goods and Services Tax (GST) authorities, small businesses and street vendors in Bengaluru are abandoning digital payments in favor of cold, hard cash. The move comes as thousands of unregistered vendors receive GST notices, with some facing demands for lakhs of rupees in taxes.

For Shankar, a modest shop owner in Horamavu, the choice to turn to cash mode was a no-brainer. "I earn a modest business of Rs 3,000 a day, and I survive on the modest profit I earn," he says. "I can no longer afford to take UPI payments."

The GST crackdown has made waves in the informal economy, with most small business owners fearing harassment and potential eviction by civic authorities, say vendors and activists. Vinay K Sreenivasa, joint secretary of Federation of Bengaluru Street Vendors Associations, says several vendors have begun preferring cash transactions to stay out of the GST net.

The GST system mandates firms with an annual turnover of more than Rs 40 lakh for goods and Rs 20 lakh for services to register and remit taxes. But former additional commissioner of commercial taxes in Karnataka, HD Arun Kumar, is skeptical of how GST authorities calculate turnover. "The onus of proof is on the officers," he says. "They have to prove the taxable turnover before they can arrive at a tax demand."

As the GST authorities in Karnataka strive to meet a collection target of Rs 1.20 lakh crore for 2025-26, the crackdown on unregistered vendors is likely to intensify. Chartered accountant Sreenivasan Ramakrishnan warns that other states may follow suit, desperate to tap into the vast informal economy. "Bengaluru may emerge as a test case," he says. "If the GST authorities can net a good chunk of revenue, other states will take the cue."

In the meanwhile, Opposition BJP MLA S Suresh Kumar is set to intervene, drawing the chief minister's notice to the distress of small traders. As events unfold, one thing becomes evident: Bengaluru street vendors are in the middle of the battle between the GST officials and the government's revenue goals.

Amidst all the turmoil, people like Shankar are left wondering about the fate of their little businesses. Can they learn to live with the new reality, or will the GST crackdown mark the demise of their means of living? Only time will tell.

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