UPI Payments India: UPI can be a world-renowned digital payment triumph, but in Bengaluru, the story has taken a dramatic turn. Throughout the city, numerous small shopkeepers have begun rejecting UPI transactions, displaying notices reading “No UPI, Only Cash.” The drive is spurred by an increasing threat of receiving GST notices from tax officials, forcing even technophile vendors in India’s IT hub to go cash-only.

Read More: OnePlus Nord 4 vs Realme GT Neo 6: Mid-Range Marvels

Read More: Samsung Galaxy A15 5G vs Google Pixel 7a: Value for Money?

A Backlash in the Land of Digital Pioneers

While India’s UPI platform has shattered global records and won international acclaim, Bengaluru, which prides itself on its willingness to adopt innovation, is seeing a people’s uprising. Numerous shopkeepers have removed QR codes and are now accepting only cash payments. The trend is not against rejecting technology but safeguarding themselves from surprise tax liabilities. Vendors state that the sale of products online has invited attention from taxmen, resulting in the shutdown of UPI operations.

The Spark: GST Notices to Small Traders

The cause of the furore is rooted in the recent actions of the GST department. A few hawkers and micro-retailers have complained of receiving large tax notices, some in lakhs. As most of these vendors earn only small daily revenues, such burdens are out of their reach. Finding it difficult to cope, they’ve returned to dealing in cash to remain in the shadows and steer clear of more hassles.

Shopkeepers Speak Out

As per The Economic Times, a trader called Shankar explained his plight I earn about ₹3,000 a day with hardly any profit. If the government begins taxing that too, how will I make ends meet? Shankar is but one of many small vendors, such as tea vendors and street hawkers, who have been served GST notices. Existing regulations make GST registration compulsory if the annual income exceeds ₹40 lakh for traders or ₹20 lakh for service providers.

Misinterpretation of UPI Transactions?

Most traders believe that not every UPI credit is business income. Some of these are received as from friends or by way of casual loans, but tax authorities supposedly treat all UPI deposits as income. This misinterpretation has spread among vendors and instilled in them doubts about making digital payments. They believe they will have to pay tax on money earned, not even by way of sales.

What the Government Is Aiming For

Reports indicate that the Karnataka government has a ₹1.2 lakh crore tax-gathering target for FY2025-26. Chief Minister Siddaramaiah is also under pressure to achieve a ₹52,000 crore welfare spending while addressing infrastructure demands made by lawmakers. Experts advise that the same GST enforcement tactics are likely to be followed in other states shortly, endangering more small vendors.

A Digital Step Backwards?

While UPI shines all over the world, India is at a turning point at home. If tiny vendors fear dropping digital payments because they worry about penalties, India’s thrust toward a cashless society may lose speed. The Bengaluru model throws into relief a developing debate between innovation and rule that may break out elsewhere as well soon.