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Indian Government Reiterates No GST on UPI Transactions Over ₹2,000

Finance Ministry confirms no proposal to levy GST on UPI transactions, citing the removal of Merchant Discount Rate in 2020 and ongoing digital payment incentives.

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Overview

  • The Finance Ministry has clarified that no GST applies to UPI transactions above ₹2,000, dismissing recent claims as baseless.
  • GST is tied to charges like the Merchant Discount Rate (MDR), which was eliminated for Person-to-Merchant UPI transactions in January 2020.
  • An Incentive Scheme launched in FY2021-22 continues to support small merchants by subsidizing low-value UPI transactions, with payouts rising to ₹3,631 crore in FY2023-24.
  • India accounted for 49% of global real-time payment transactions in 2023, highlighting its leadership in digital payments innovation.
  • UPI transaction values have grown exponentially, reaching ₹260.56 lakh crore by March 2025, with ₹59.3 lakh crore attributed to Person-to-Merchant transactions.