Govt uses UPI data to target unregistered traders, aims to boost GST revenue

In a move to strengthen Goods and Services Tax (GST) compliance and ramp up revenue, the government has initiated action against thousands of unregistered traders identified through Unified Payments Interface (UPI) data. Authorities have issued notices to around 14,000 individuals whose digital payment records suggest they surpassed the GST registration threshold but failed to enrol under the tax system.

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Under current norms, businesses selling goods with an annual turnover exceeding ₹40 lakh or offering services above ₹20 lakh must register for GST. Those with turnover below ₹1.5 crore can opt for a simplified scheme with a 1% tax rate.

The state's commercial taxes department is leveraging UPI transaction data to pinpoint businesses accepting payments via QR codes yet operating outside the GST network. Officials believe this tech-driven initiative could bring an additional one lakh traders into the tax fold and potentially generate ₹10,000 crore in revenue, helping to bridge a 13% shortfall in achieving the annual ₹1.2 lakh crore target.

While the crackdown targets fairness in tax compliance, small business owners — including grocers, vendors, and bakery operators — have expressed concern over steep tax arrears being demanded retroactively. Some traders claim liabilities dating back to 2021 amount to ₹40–50 lakh.

Authorities have clarified that exempted goods and micro-businesses such as hawkers remain outside the GST net. The government has also assured support, including instalment options, for genuine cases facing financial strain.