No GST on UPI transactions over Rs 2,000, clarifies govt amid rumours
In a statement, the Ministry of Finance clarified that there is currently "no such proposal" to levy Goods and Services Tax on UPI payments.
- Guwahati,
- Apr 18, 2025,
- Updated Apr 18, 2025, 8:42 PM IST
The government on Friday (April 18) denied any plans to impose GST on UPI transactions above Rs 2,000, calling such claims “false and misleading.”
In a statement, the Ministry of Finance clarified that there is currently "no such proposal" to levy Goods and Services Tax on UPI payments. Since January 2020, the Merchant Discount Rate (MDR) on person-to-merchant UPI transactions has been removed, and GST is only applicable on charges like Merchant Discount Rate (MDR), which does not exist for UPI.
To further encourage digital transactions, the government has been running an incentive scheme for low-value UPI payments since FY 2021-22. The scheme, aimed at helping small merchants, has seen allocations rise steadily, from Rs 1,389 crore in FY22 to Rs 3,631 crore in FY24.
According to the 2024 ACI Worldwide Report, India processed 49 per cent of the world’s real-time digital payments in 2023. UPI transactions have jumped from Rs 21.3 lakh crore in 2019-20 to a projected Rs 260.56 lakh crore in FY25.