No GST on UPI Payments Above ₹2,000, Says Finance Ministry
Why in the news
The Centre rejected online claims that high-value UPI payments could attract GST, saying no such proposal exists.
Key facts
- Ministry statement: there is no such proposal before the government.
- GST applies only to certain services, for example the merchant discount rate (MDR) on some payment instruments.
- No MDR is levied on UPI P2M transactions, so no GST applies.
- CBDT scrapped MDR on UPI and RuPay in January 2020.
Significance
- UPI handles billions of transactions every month; a tax would raise costs and weaken financial inclusion and the cashless push.
- The clarification keeps UPI payments charge-free for users and merchants.
Exam angle
- Term: MDR, the fee merchants pay on digital payments.
- Rule: no MDR on UPI and RuPay since January 2020.