Pani Puri Vendor's UPI Transactions Under GST Radar For Crossing Rs 40 Lakh

New Delhi: Street vendors, a cornerstone of daily commerce, are now facing scrutiny under the Goods and Services Tax (GST) for exceeding the Rs 40 lakh threshold in business transactions.

Recently, the GST department issued a notice to a popular pani puri vendor in Tamil Nadu, claiming that annual sales exceeded Rs 40 lakh. The vendor’s transactions were flagged by online payment platforms RazorPay and PhonePe.

The notice revealed that the pani puri business caught the attention of the State Tax Officer after recording a turnover of Rs. 40,11,019 in FY 2023-24, surpassing the Rs 40 lakh threshold for GST registration.

“Further, as per sub-section (2) of section 23 of the TNGST/CGST Act, 2017, the Government, by notification has exempted up to Rs. 40 lakh any person who is engaged in exclusive supply of Goods from obtaining registration,” the document stated.

“Furthermore, supplying goods/services without obtaining GST registration even after crossing the threshold limit is an offence, liable to be penalised under section 122(1)(xi) of the TNGST Act, 2017 that extends to Rs. 10,000 or 10% of the tax due, whichever is higher.”  

The development has ignited a wave of humorous reactions on social media, with many joking about the idea of a Pani Puri vendor transforming into a corporate mogul.   

"40 L is sales of 11,000/ day. Assuming full 365 days. Avg plate ₹40. No of pani puri plates per day 270. Doable if it’s best in the area…like bisleri pani puri on Andheri. After all expenses, can save 20 lacs easily a year lol. 
crazy tax loot", an X user shared.

"This might be due to two things -  His account might be used as mule account, He's having other businesses apart from Pani puri", another shared. 

For the unversed, GST registration is compulsory for businesses with annual turnover exceeding Rs 40 lakh.

This follows an earlier case where a street vendor in Aligarh, Uttar Pradesh, was raided by the GST department for allegedly earning Rs 60 lakh annually and evading taxes. Senior tax officials have voiced concerns over widespread tax evasion among roadside vendors who primarily conduct cash transactions without proper GST registration.