A recent viral claim suggesting that the Indian government is considering levying Goods and Services Tax (GST) on UPI transactions above ₹2,000 has been refuted by the Ministry of Finance.
The ministry has categorically dismissed these allegations, stating that there is no such proposal under consideration.
Social media posts and some online reports have circulated misinformation that GST would soon apply to UPI payments exceeding ₹2,000. However, the Press Information Bureau (PIB) has released an official statement debunking these claims, emphasizing that GST is levied only on certain payment-related charges and not on the transactions themselves.
GST is applicable to Merchant Discount Rate (MDR)—a fee charged by payment service providers for processing transactions using certain instruments. However, in January 2020, the Central Board of Direct Taxes (CBDT) removed MDR for Person-to-Merchant (P2M) UPI transactions via a government notification. Consequently, there is no GST applicable to UPI payments, as the MDR itself does not exist for these transactions.
To encourage the widespread adoption of digital payments, the Government of India has implemented an Incentive Scheme since FY 2021-22, benefiting small merchants and promoting low-value transactions. The financial commitment reflects the administration’s efforts to sustain UPI’s growth:
- FY 2021-22: ₹1,389 crore allocated
- FY 2022-23: ₹2,210 crore allocated
- FY 2023-24: ₹3,631 crore allocated
Additionally, according to the ACI Worldwide Report 2024, India led the world in real-time transactions, accounting for 49% of global digital payments in 2023.
UPI transactions have surged exponentially, reaching ₹260.56 lakh crore by March 2025—a sharp rise from ₹21.3 lakh crore in FY 2019-20. P2M transactions alone touched ₹59.3 lakh crore, demonstrating growing merchant acceptance and consumer trust in the platform.
The Finance Ministry has reiterated that the government remains committed to promoting UPI-based payments and that there is no GST applicable to UPI transactions exceeding ₹2,000. This clarification should put all doubts to rest and prevent further misinformation from spreading.
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