Govt. Clarifies That No Proposal to Levy GST on UPI Transactions Above ₹2,000 | Press Release

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  • Last Updated on 21 April, 2025

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GST on UPI transactions

Press Release dated April 18th, 2025

The Government has clarified that there are no proposals to impose GST on UPI transactions above Rs. 2,000, dismissing such claims as baseless. GST is only levied on charges like the Merchant Discount Rate (MDR) for certain payment methods, but since MDR was removed for Person-to-Merchant (P2M) UPI transactions in January 2020, no GST applies to these transactions.

Additionally, the Government continues to support the growth of UPI through an Incentive Scheme targeting small merchants, with allocations of Rs. 1,389 crore in FY 2021-22, Rs. 2,210 crore in FY 2022-23, and Rs. 3,631 crore in FY 2023-24. These initiatives have contributed to India’s leadership in global digital payments, with UPI transaction values growing exponentially, reaching Rs. 260.56 lakh crore by March 2025.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied