Government Debunks Rumors of New GST on UPI Transactions

The government clarifies it's not planning to impose GST on UPI transactions over Rs 2,000. Current reports suggesting this levy are false. No MDR on UPI transactions means no GST. UPI values are growing massively. An incentive scheme is sustaining UPI's growth, aiding small merchants.

On Friday, the government firmly debunked reports suggesting a new GST on UPI transactions exceeding Rs 2,000. The finance ministry labeled such claims as false and baseless.

Addressing the speculation, officials confirmed that no proposal exists to levy GST on UPI transactions. Currently, GST applies only to transaction-related charges, like the Merchant Discount Rate (MDR), which was removed for UPI payments in early 2020.

UPI's growth is staggering, climbing from Rs 21.3 lakh crore in FY 2019-20 to a projected Rs 260.56 lakh crore by 2025. The government continues to push digital payment adoption with a robust incentive scheme, which disbursed Rs 3,631 crore in 2023-24 to support small merchants.

(With inputs from agencies.)