Is GST applicable on UPI payments over ₹2,000—Check government's response
What's the story
The Indian government has denied recent rumors of levying Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions above ₹2,000.
The Ministry of Finance released an official statement via the Press Information Bureau (PIB), calling the claims false and misleading.
The government reiterated its commitment to promoting digital payments through UPI.
Government's stance
No GST on UPI transactions
The government clarified that there's no proposal to levy GST on UPI transactions over ₹2,000.
"The claims that the government is considering levying GST on UPI transactions over ₹2,000 are completely false, misleading, and without any basis," read the PIB statement.
"Currently, there is no such proposal before the government," the PIB statement further reassured users and merchants alike.
GST exemption
No Merchant Discount Rate on UPI transactions
GST is typically levied on charges such as the Merchant Discount Rate (MDR), associated with payments made through certain instruments.
However, since January 2020, the Central Board of Direct Taxes (CBDT) has exempted the MDR on Person-to-Merchant (P2M) UPI transactions through a Gazette Notification dated December 30, 2019.
Since there is no MDR levied on UPI transactions, there is no GST on them either.