Four more states seek UPI merchant data after Karnataka
Several states—including Karnataka, Andhra Pradesh, Uttar Pradesh, Tamil Nadu, and Gujarat—are now using UPI payment data to spot traders who should be registered for GST.
If your annual sales cross ₹40 lakh (goods) or ₹20 lakh (services), you're supposed to sign up for GST.
Karnataka alone expects about 1 lakh new small businesses to get onboard because of this move.
How states are using UPI data
Karnataka's tax department has already sent notices to around 14,000 traders after reviewing their UPI transactions from the past few years—even counting sales of exempt items like bread in the turnover calculations.
Many small shop owners are worried and some have switched back to cash payments out of confusion or fear of getting into trouble.
While officials say it's about fairness and boosting revenue, there's concern this could slow down India's digital payments push if more people avoid UPI just to stay under the radar.