A recent ₹29 lakh GST notice issued to a vegetable vendor in Karnataka has reignited debate around taxation, digital payments, and fairness in India’s economy.
The vendor reportedly received ₹1.63 crore through UPI transactions over four years roughly ₹40 lakh per year, or ₹3 lakh per month in sales.
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However, industry observers argue that this figure doesn’t reflect his real income.
After accounting for perishables, shop expenses, and slim margins, such vendors often operate at a 10% net margin.
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This means the vendor likely earned around ₹4 lakh annually roughly ₹30,000 per month.
Yet, he now faces a ₹29 lakh tax notice, raising serious concerns about the government’s approach to informal sector taxation.
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Many pointed out that while salaried employees are taxed at source, thousands of small business owners despite earning more manage to avoid tax.
The growing use of UPI has exposed actual business volumes that were previously hidden under cash transactions.
But critics warn against blindly treating digital payment data as taxable income without considering costs, wastage, and ground realities.
Supporters of the vendor say such aggressive tax demands can discourage digital adoption altogether.
“Expecting small vendors to file monthly GST returns, maintain books, and explain every ₹50 transaction is unrealistic,” one user commented online.
Others noted that in developed countries, tax systems are better streamlined and more considerate of operating margins.
In India, however, tax evasion remains rampant, and honest taxpayers bear the brunt of a flawed system.
Experts suggest that instead of issuing blanket notices based on gross receipts, tax policy should focus on educating small business owners, simplifying compliance, and assessing real profits.
Otherwise, incidents like this could undo progress made in promoting digital finance among the lower-income population.
A recent ₹29 lakh GST notice issued to a vegetable vendor in Karnataka has reignited debate around taxation, digital payments, and fairness in India’s economy.
The vendor reportedly received ₹1.63 crore through UPI transactions over four years roughly ₹40 lakh per year, or ₹3 lakh per month in sales.
However, industry observers argue that this figure doesn’t reflect his real income.
After accounting for perishables, shop expenses, and slim margins, such vendors often operate at a 10% net margin.
This means the vendor likely earned around ₹4 lakh annually roughly ₹30,000 per month.
Yet, he now faces a ₹29 lakh tax notice, raising serious concerns about the government’s approach to informal sector taxation.
Many pointed out that while salaried employees are taxed at source, thousands of small business owners despite earning more manage to avoid tax.
The growing use of UPI has exposed actual business volumes that were previously hidden under cash transactions.
But critics warn against blindly treating digital payment data as taxable income without considering costs, wastage, and ground realities.
Supporters of the vendor say such aggressive tax demands can discourage digital adoption altogether.
“Expecting small vendors to file monthly GST returns, maintain books, and explain every ₹50 transaction is unrealistic,” one user commented online.
Others noted that in developed countries, tax systems are better streamlined and more considerate of operating margins.
In India, however, tax evasion remains rampant, and honest taxpayers bear the brunt of a flawed system.
Experts suggest that instead of issuing blanket notices based on gross receipts, tax policy should focus on educating small business owners, simplifying compliance, and assessing real profits.
Otherwise, incidents like this could undo progress made in promoting digital finance among the lower-income population.
A vegetable vendor in Karnataka receives ₹29 lakh GST notice after digital transactions via UPI total ₹1.63 crore over four years. pic.twitter.com/mSssB6W2EH
— Indian Tech & Infra (@IndianTechGuide) July 22, 2025