New Delhi, April 18: The Ministry of Finance has firmly denied recent claims that the government is planning to impose Goods and Services Tax (GST) on UPI transactions exceeding ₹2,000.
Calling such reports "completely false, misleading, and baseless," the ministry issued a statement on Friday confirming that no such proposal is under consideration.
Currently, GST applies only to certain charges such as the Merchant Discount Rate (MDR) associated with specific payment instruments. However, since January 2020, MDR has been removed from Person-to-Merchant (P2M) UPI transactions, following a Gazette Notification issued on December 30, 2019, by the Central Board of Direct Taxes (CBDT). As there is no MDR on these transactions, no GST is applicable.
The government reiterated its strong commitment to promoting digital payments through UPI. To further support the growth of UPI, an Incentive Scheme was introduced in FY 2021–22, targeting low-value P2M transactions. This initiative is aimed at helping small merchants by offsetting transaction costs and encouraging broader participation in the digital economy.
According to the 2024 ACI Worldwide Report, India accounted for 49% of all global real-time transactions in 2023, reaffirming its leadership in digital payment innovation. UPI transaction value has surged from ₹21.3 lakh crore in 2019–20 to a projected ₹260.56 lakh crore by March 2025. Notably, P2M transactions alone have reached ₹59.3 lakh crore, highlighting growing adoption among both merchants and consumers.
(With agency reports)
