Bakeries, tea stalls, and condiment stores across Karnataka halted the sale of tea, coffee, and milk as part of a symbolic protest against the recent GST notices issued to small-scale vendors by the Commercial Tax Department. The protest, which spread across major towns and cities, saw small traders wearing black badges and armbands as they expressed anger and frustration over what they believe is an unfair and aggressive tax crackdown.

The protest was largely focused on beverage counters in bakeries and small shops, with many vendors choosing to only serve black tea and black coffee to customers as a peaceful form of resistance. Labour rights activist Ravi Shetty, speaking from one of the protest sites, said, “Today, we are wearing black bands on our arms. No bakery is selling milk. Only black tea is being offered as a mark of protest. This is just the beginning. If the government does not respond, the protests will grow stronger.”

This unrest began after hundreds of small traders, including tea vendors, grocers, and local shopkeepers, received tax notices running into lakhs or even crores of rupees. The GST department reportedly analysed digital payment data, especially UPI transactions, recorded between 2021–22 and 2024–25. Traders who received Rs 20 lakh or more for services or Rs 40 lakh or more for goods through digital modes alone were issued tax demand notices.

Officials from the Commercial Tax Department clarified that it is not the mode of payment: UPI or cash, that matters, but the total turnover. They said that many small traders may not have declared the full extent of their income, and digital payment records are now being used to track tax evasion.

However, small vendors argue that the notices are based on misinterpretations, and they feel they are being targeted unfairly. Many of them have now removed UPI payment options altogether, replacing them with “No UPI, Cash Only” signs out of fear. In local markets and neighbourhood bakeries, this shift has caused concern among customers and suppliers alike.

One such vendor, Shankargouda Hadimani, a vegetable seller from Haveri, was issued a GST notice demanding Rs 29 lakh. Officials arrived at this figure after reviewing his UPI transactions over four years, which added up to Rs 1.63 crore. However, Shankargouda insists that he only sells fresh vegetables, which are exempt from GST, and that he files taxes properly. “I was shocked. I’ve never seen such a huge amount in my life, and now I’m being told I owe it as tax. I don’t even know how I would arrange that kind of money,” he said.

The protest has triggered a wave of fear among small vendors across the state. Many feel they are being harassed for using digital payment platforms that were once promoted by the government itself. The issue has gained significant public attention, leading to calls for clarity, fairness, and dialogue between the government and the business community.

What the Chief Minister said

In response to the growing outrage,Chief Minister Siddaramaiah has scheduled a high-level meeting at his residence at 3 PM today to hold discussions with trader representatives and senior officials. The outcome of this meeting will be closely watched, as trader associations have already announced a statewide bandh on July 25, warning that the protests will escalate if the GST notices are not withdrawn or reviewed. With public sympathy growing and business owners under pressure, all eyes are now on the state government to find a fair and immediate resolution.