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Government Confirms No GST on UPI Transactions Over ₹2,000

The Ministry of Finance dismisses rumors as baseless, reiterating that GST cannot apply due to the absence of MDR on such payments.

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FILE PHOTO: A commuter walks past the building of India's Ministry of Finance during dusk in New Delhi (REUTERS)
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Overview

  • The Indian government has officially denied any plans to impose Goods and Services Tax (GST) on UPI transactions exceeding ₹2,000.
  • The Ministry of Finance clarified that since no Merchant Discount Rate (MDR) is charged on UPI transactions, GST is not applicable.
  • The MDR on person-to-merchant UPI transactions was removed in January 2020, as per a notification issued by the Central Board of Direct Taxes.
  • Transaction values on UPI have surged from ₹21.3 lakh crore in FY 2019-20 to ₹260.56 lakh crore by March 2025, reflecting its widespread adoption.
  • To encourage low-value digital payments, the government has increased its incentive scheme disbursements from ₹2,210 crore in FY 2022-23 to ₹3,631 crore in FY 2023-24.