GST on UPI Transactions: The government has completely rejected the reports that it was claimed that it is being planned to impose GST on UPI transactions of more than Rs 2,000. In a statement issued by the Finance Ministry, these claims have been described as “false, misleading and without basis”. The statement said, “The government has no such proposal. This news is completely wrong.”
GST will be charged on UPI transaction?
The government has assured the common people and traders that its policy of promoting digital transactions through UPI will continue and such rumors should be noticed. It has been clarified by the Finance Ministry that GST is levied only on the same charges that are associated with the service fee imposed by the payment gateway or other mediums (eg Merchant Discount Rate – MDR).
Government gave this information
The government has once again made it clear that no GST) is not imposed on UPI transactions. Actually, GST is applied only to the merchant discount rate (MDR) made in payments made through certain equipment. Since January 2020, CBDT has removed MDR on P2M (Person to Merchant) UPI transaction, meaning that no additional fee is being charged on UPI payment.
Since January 2020, the Central Board of Direct Taxes (CBDT) issued a notification and has completely removed the MDR from the person on a merchant (P2M) transaction. Due to this, GST is also not taken on these transactions. According to ACI Worldwide’s 2024 report, 49% of the real-time digital payments made worldwide in 2023 occurred only in India. This reflects India’s leading role in digital payment technology.