Is the Government Imposing GST on UPI Transactions Over ₹2,000? Here’s the Truth Borok Now, April 18, 2025 — The Ministry of Finance has ...
Is the Government Imposing GST on UPI Transactions Over ₹2,000? Here’s the Truth
Borok Now, April 18, 2025 — The Ministry of Finance has strongly refuted recent claims suggesting that the government is planning to levy Goods and Services Tax (GST) on UPI transactions exceeding ₹2,000. Terming these reports as "completely false and misleading," the ministry clarified that no such proposal is under consideration.
In an official statement, the government emphasized that no GST is levied on UPI payments since there are no Merchant Discount Rate (MDR) charges applicable to Person-to-Merchant (P2M) UPI transactions. The MDR was abolished by the Central Board of Direct Taxes (CBDT) through a gazette notification issued on December 30, 2019, and took effect from January 2020.
“Since no MDR is charged on these transactions, there is consequently no GST applicable either,” the statement added.
Incentive Scheme for UPI Growth
To further encourage the use of UPI for small-value transactions, the government has been running an Incentive Scheme since FY 2021–22, which supports small merchants and promotes digital adoption across India.
- ₹1,389 crore in FY 2021–22
- ₹2,210 crore in FY 2022–23
- ₹3,631 crore in FY 2023–24
India Leads in Global Digital Payments
According to the ACI Worldwide Report 2024, India accounted for 49% of all global real-time transactions in 2023, reaffirming its leadership in digital payments and fintech innovation.
The volume and value of UPI transactions have surged from ₹21.3 lakh crore in FY 2019–20 to ₹260.56 lakh crore by March 2025, with P2M transactions alone reaching ₹59.3 lakh crore.
The Ministry reaffirmed its commitment to fostering a digitally empowered society and urged the public to dismiss misinformation and rely on official sources.
