GST on UPI transactions: Government denies reports of levying GST on UPI transactions over Rs 2000 | India-Business News

The authorities on Friday denied reports suggesting GST levying on UPI transactions exceeding Rs 2,000, calling such claims “completely false, misleading, and without any basis.”
In an official assertion, the finance ministry mentioned, “Currently, there is no such proposal before the government,” dismissing considerations that had surfaced earlier.
The ministry additionally clarifyed the tax framework, explaining that GST is simply relevant on costs just like the service provider low cost fee (MDR), that are related for sure cost strategies.
However, in January 2020, the Central Board of Direct Taxes (CBDT) eradicated MDR on person-to-merchant (P2M) UPI transactions.
“Since currently no MDR is charged on UPI transactions, there is consequently no GST applicable to these transactions,” the ministry said.
UPI, or Unified Payments Interface, has witnessed a outstanding surge in utilization, with transaction values skyrocketing from Rs 21.3 lakh crore in 2019-20 to a hovering Rs 260.56 lakh crore, that was projected by the tip of March 2025.
To additional encourage this progress, the federal government has been operating an incentive scheme since 2021-22, particularly geared toward low-value P2M UPI transactions. The initiative is designed to help small retailers by absorbing transaction prices and driving broader adoption of digital funds.
In the final monetary 12 months, 2023-24, Rs 3,631 crore was disbursed below this scheme, a pointy rise from Rs 2,210 crore in 2022-23. In FY 2021-2011, the allocation was Rs 1,389 crore.
“The total incentive payouts under this scheme over the years reflect the government’s sustained commitment to promoting UPI-based digital payments,” the ministry added.
The press launch mentioned that India accounted for 49 per cent of worldwide actual time transactions in 2023, as per the ACI Worldwide report 2024.