Government clarifies no GST on UPI transactions over ₹2,000
The Hindu
Government clarifies no GST on UPI transactions over ₹2,000, committed to promoting digital payments with incentive scheme.
The Government on Friday (April 18, 2025) clarified that it is not mulling to levy GST on UPI transactions above ₹2,000.
Clarifying on reports, which said that the government is considering levying Goods and Services Tax (GST) on UPI transactions over ₹2,000, the Finance Ministry said they are completely false, misleading, and without any basis.
“Currently, there is no such proposal before the government,” the Ministry said in a statement.
GST is levied on charges, such as the Merchant Discount Rate (MDR), relating to payments made using certain instruments.
Effective January 2020, the Central Board of Direct Taxes (CBDT) has removed the MDR on person-to-merchant (P2M) UPI transactions.
“Since currently no MDR is charged on UPI transactions, there is consequently no GST applicable to these transactions,” the Ministry said.
UPI transaction values have seen an exponential increase, growing from ₹21.3 lakh crore in FY 2019-20 to ₹260.56 lakh crore by March 2025.
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