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Government Denies GST on UPI Payments Above Rs 2,000

Synopsis:

The Indian government clarified it has no proposal to impose GST on UPI transactions above Rs 2,000. With UPI contributing 49% of global real-time payments in 2023, India continues to lead the global digital payment transformation.


The Ministry of Finance has refuted widespread speculation regarding the imposition of Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions exceeding Rs 2,000. On Friday, through the Press Information Bureau (PIB), the government labelled such reports as “false, misleading, and without any basis.” This clarification aims to maintain public trust in digital payment systems, especially amid growing adoption of platforms like Paytm and Mobikwik.

Also read: Biocon Board To Consider Fundraising Proposal On April 23, 2025

Key Takeaways

  1. There is no government proposal to impose GST on UPI transactions above Rs 2,000.

  2. GST is currently not applicable on UPI as no Merchant Discount Rate (MDR) is levied.

  3. The government continues to support and promote digital payments.

  4. India led the world in real-time payments in 2023, contributing 49% globally.

Also read: India, France To Sign Rs 63,000 Crore Rafale-M Deal On April 28

Current GST Structure On UPI

UPI transactions from consumers to merchants (P2M) have been MDR-free since January 2020, following a notification issued by the Central Board of Direct Taxes (CBDT) in December 2019. As GST is only levied on MDR or similar charges, and UPI transactions do not attract such fees currently, no GST is applicable to them.

UPI Transactions And Tax Applicability

Transaction Type

MDR Applicable

GST Applicable

Person to Person (P2P)

No

No

Person to Merchant (P2M) via UPI

No

No

Card-based Transactions

Yes

Yes

India’s Leadership In Real-Time Payments

According to the ACI Worldwide Report 2024, India processed 49% of all global real-time transactions in 2023, reflecting its rapid shift to cashless economies. UPI remains the backbone of this surge, offering a seamless, secure, and charge-free payment option for users and merchants alike.

While platforms like Paytm and Mobikwik continue to grow in user base and transaction volumes, the assurance that no new GST is planned on UPI transactions further solidifies the government’s stand on promoting cashless and digital economies across the country.

Also read: India Targets Rs 50,000 Crore in Defence Exports by 2030

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This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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