Street Vendors Hit with Crore-Worth Income Tax, GST Notices: How to Stay Safe from PAN Misuse, Identity Theft
Street vendors across India are receiving crores-worth of tax notices due to PAN misuse and identity theft, detailing the risks faced by the country’s most vulnerable workers.
PAN misuse – GST fraud notice – Income tax scam – Street vendor tax – taxscan
PAN misuse – GST fraud notice – Income tax scam – Street vendor tax – taxscan
Prince Suman, an egg seller from Damoh, Madhya Pradesh, earns less than Rs. 1 lakh in a year by selling eggs on the streets. But in March 2025, he was shocked to receive a GST notice asking him to pay Rs. 6 crore. The notice claimed that he was involved in transactions worth Rs. 50 crore. Prince had no idea about these transactions.
This is not just Prince’s story. Across India, many poor workers, such as juice sellers, potters, sanitation workers, and daily wage laborers, are receiving income tax or GST notices for amounts they cannot even imagine. These people are not running big businesses. They are victims of identity theft and misuse of their PAN (Permanent Account Number) details.
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Recent Cases of PAN Misuse and Fake Tax Notices
- Juice Seller: Mohammad Raees from Aligarh, Uttar Pradesh, received an income tax notice for Rs 7.79 crore.
- Egg Seller: Prince Suman from Damoh, Madhya Pradesh, got a GST notice for Rs 6 crore, linked to transactions worth Rs 50 crore.
- Rajasthan Potter: Vishnu Kumar Prajapat from Bundi, Rajasthan, was issued an income tax notice for Rs 10.61 crore.
- Sanitation Worker at SBI: Karan Kumar Valmiki from Aligarh, Uttar Pradesh, received an income tax notice of Rs 33.88 crore despite earning Rs 15,000 monthly.
- Daily Wage Laborer: Sabra, a daily wage laborer from Uttar Pradesh, received an income tax notice for Rs 4.88 crore, which she does not know of.
These vendors, workers often lack formal education or awareness of tax rules, and their sudden exposure to formal financial systems has left them unprepared to deal with complex tax regulations.
Why PAN is Being Misused?
PAN is required for many activities, like:
- Opening a bank account
- Buying gold or jewelry over Rs. 2 lakh
- Filing income tax returns
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Because PAN is used in many places, criminals misuse it by:
- Creating fake companies using stolen PAN details
- Applying for loans in someone else’s name
- Claiming false tax deductions like house rent allowance (HRA)
- Doing business transactions without the real person’s knowledge
According to the Income Tax Department, India has more than 70 crore PAN cards. There are thousands of cases every year where PAN numbers are misused.
Why Are Street Vendors and Daily Workers at Risk?
Street vendors and small workers are often not aware of tax laws. They may give photocopies of their PAN or Aadhaar to people without understanding the risks. Many of them now accept payments through UPI and QR codes, which makes their transactions visible online.
If a vendor’s digital sales go above Rs. 40 lakh in a year, they must register for GST. But many of these small sellers do not know this rule. They also do not realize when criminals use their PAN details to register companies or open bank accounts.
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How to Stay Safe from PAN Misuse
For Everyone:
- Do not give your PAN details to anyone unless it is really needed.
- If you give a PAN photocopy, write the reason on it. For example, “For bank KYC only” or “For SIM card registration only.”
- Link your PAN with your Aadhaar on the income tax website (incometax.gov.in) to help prevent misuse.
- Check your Annual Information Statement (AIS) every few months on the income tax portal. It will show if there are any transactions made using your PAN that you do not recognize.
- If you suspect misuse, report it on the government’s cybercrime website (cybercrime.gov.in) or at Protean PAN Services.
For Street Vendors and Small Sellers:
- If your yearly digital sales are more than Rs. 40 lakh, you must register for GST at gst.gov.in.
- Use separate UPI or QR codes for personal and business payments. This will help you avoid confusion and track your earnings properly.
- Ask for help from local NGOs or use tax helplines like 1800 103 0025 if you do not understand these rules.
Government Measures
The Income Tax Department and the Central Board of Direct Taxes (CBDT) have asked people not to share their PAN or Aadhaar freely. They have also created portals for people to report PAN misuse. But experts believe this is not enough.
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Some experts suggest that the government should:
- Make tax rules easier for small vendors and workers.
- Use biometric verification (like fingerprints) for opening companies or bank accounts.
- Check more carefully before giving GST registrations.
These steps can help stop criminals from using someone else’s PAN.
What You Can Do Right Now
- Check your Annual Information Statement (AIS) today on incometax.gov.in.
- Make sure your PAN is linked to your Aadhaar.
- Do not share your PAN unless you are sure it is safe.
Talk to your local tax office or NGO if you get a notice that you do not understand.
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