Bengaluru, July 25, 2025 – Thousands of small traders across Bengaluru are observing a complete shutdown today, marking the final phase of a three-day protest against retrospective GST tax notices issued by the Karnataka Commercial Taxes Department. The strike, or 'bandh', targets demands related to UPI transactions exceeding prescribed thresholds for the financial year 2021-22, impacting many previously unregistered or small vendors who now face substantial back tax demands.
The traders argue that these notices, some ranging from ₹20 lakh to over ₹2 crore, are unfair and threaten their very survival. The protest culminated today with the complete closure of bakeries, condiment shops, and small petty shops. This follows earlier phases of the protest, which saw a suspension of milk sales on July 23 and a ban on gutka and cigarette sales on July 24.
Fear of retrospective penalization has already led many vendors in markets like KR Market, Horamavu, and Shivajinagar to withdraw their UPI QR codes, reverting to cash-only transactions. A large gathering of thousands of small business owners and their families from across Karnataka is also expected at Freedom Park today to voice their grievances.
The protesting traders are demanding policy clarity, relaxation for micro businesses, awareness programs, and a constructive dialogue with authorities. They warn that the current situation risks reversing the significant progress made in digital payment adoption within the informal sector and could severely damage livelihoods.
While authorities maintain that notices are only sent to legally liable businesses that have crossed GST thresholds, they urge traders to respond through legal channels and register under GST schemes. This widespread bandh is seen as a strong plea for more balanced enforcement policies and greater empathy for the small traders who form the backbone of India's grassroots digital economy.
