Swipe, Scan, Repeat: No GST on UPI, Even for Big Amounts

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In a robust refutation of circulating speculations, the Ministry of Finance has absolutely dismissed any proposal to charge Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions over Rs 2,000. In an official communiqué, the government termed such rumors as "completely false, misleading, and without basis," giving millions of digital payments users and merchants in India an assurance of peace of mind.

No Merchant Discount Rate (MDR) is currently charged on UPI payments—a policy adopted since January 2020—so no GST is payable on such payments. The Ministry stated that GST applies only to service charges such as MDR, which are non-existent for UPI Person-to-Merchant (P2M) transactions.

The government once again reaffirmed its focus on digital payments, with the exponential rise in UPI seeing values going up from Rs 21.3 lakh crore in FY 2019-20 to an estimated Rs 260.56 lakh crore as of March 2025. A current incentive scheme also augments low-value UPI transactions, particularly helping small merchants and encouraging innovation in India's digital payments ecosystem.

Source: The Economic Times