BENGALURU: The Commercial Tax Department has issued notices to around 6,000 small business owners, including those running bakeries, confectioneries, condiment shops, and vegetable stalls where sales have exceeded the Rs 40 lakh annual turnover threshold from 2021 to 25, based on UPI data.
The department has collected data of 40,000 UPI transactions and identified those who need to register for GST as they are liable to pay tax. The exempted traders under GST regime include fruit and vegetable vendors.
According to the department’s Additional Commissioner, Chandrashekhar Naik, those who provide documentation for sales of milk, bread and vegetables will not have to pay tax, and interest on pending taxes may be waived. However, businesses with a turnover of more than Rs 40 lakh are required to register for GST annually.
Business owners have the option to register under the composite tax scheme, which would require them to pay a tax rate of 1 per cent. The department has advised shop owners to visit their local GST office to resolve any issues. No accounts have been frozen and shop owners are encouraged to provide documentation to reduce their GST liability, he pointed out.
“We don’t want to complicate the tax. The traders are supposed to keep the bills of one year. There is no necessity of providing bills for all four years. If they have one year’s of transactions, bills are enough. GST registration is compulsory for those who have a turnover of Rs 40 lakh in the goods sector and Rs 20 lakh in the services sector”, he said.
“If they are doing business under Rs 3 crore turnover, they will come under compensation. We are calculating through UPI data. This is not the final step; it is a clarification test. We will exempt interest and penalty after review. We have issued notice based on the UPI data”, Chandrashekhar Naik added.
“Businesses with an annual turnover above Rs 40 lakh are liable to pay tax, be it be through UPI or cash transaction. We’ve obtained information on around 40,000 UPI transactions. Out of these, 6,000 individuals have been identified for having a turnover exceeding Rs 40 lakh, and notices have been issued to them”, Naik said.
The notices require these individuals to provide documentation for their transactions. However, they don’t need to provide records for the past four years; one year’s records will be sufficient. Traders in milk, bread and vegetables are exempt from tax. If documentation is provided, interest on pending taxes may be waived.
Businesses can opt for the composite tax scheme, which would require them to pay a tax rate of 1 per cent. By providing documentation, businesses can reduce their GST liability, the official pointed out.
