UPI Transactions Above ₹2,000 Not Subject to GST, Clarifies Government
NEW DELHI: The recent claims suggesting that the Government is contemplating imposing Goods and Services Tax (GST) on UPI transactions exceeding ₹2,000 are entirely false, misleading, and lack any foundation. As of now, there is no such proposal under consideration by the Government.
It is important to note that GST is currently imposed on charges like the Merchant Discount Rate (MDR) associated with payments made using specific instruments. However, starting from January 2020, the Central Board of Direct Taxes (CBDT) eliminated the MDR on Person-to-Merchant (P2M) UPI transactions through a Gazette Notification issued on December 30, 2019.
Given that no MDR is currently applied to UPI transactions, there is no GST applicable to these transactions either. The Government is steadfast in its commitment to encouraging digital payments through UPI.
The claims that the Government is considering levying GST on UPI transactions over ₹2,000 are completely false, misleading, and without any basis.
— CBIC (@cbic_india) April 18, 2025
👉Currently, there is no such proposal before the government.
👉GST is levied on charges, such as the Merchant Discount Rate…
To bolster and sustain the growth of UPI, an Incentive Scheme has been in place since the fiscal year 2021-22. This scheme is designed to promote low-value UPI (P2M) transactions, benefiting small merchants by reducing transaction costs and fostering broader participation and innovation in digital payments.
The Government’s unwavering dedication to promoting UPI-based digital payments is evident in the substantial incentive payouts under this scheme over the years:
– FY2021-22: ₹1,389 crore
– FY2022-23: ₹2,210 crore
– FY2023-24: ₹3,631 crore
These initiatives have played a significant role in enhancing India’s robust digital payments landscape. According to the ACI Worldwide Report 2024, India led the global real-time transactions market in 2023, accounting for 49% of transactions worldwide, reaffirming its status as a pioneer in digital payments innovation.
The value of UPI transactions has experienced a significant surge, rising from ₹21.3 lakh crore in FY 2019-20 to ₹260.56 lakh crore as of March 2025. In particular, Person-to-Merchant (P2M) transactions have soared to ₹59.3 lakh crore, indicating a rise in merchant acceptance and consumer trust in digital payment solutions.
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