Is GST Being Levied on UPI Transactions Over ₹2,000? Here’s the Truth


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	Blog Categories All Corporate Laws (2) Direct Tax (3) Govt. Schemes (1) Indirect Tax (4) Trademarks (3) Is GST Being Levied on UPI Transactions Over ₹2,000? Here’s the Truth Category: Indirect Tax, Posted on: 21/04/2025 Visitor Count:184 No GST on UPI Transactions: Official Position On April 18, 2025, the Press Information Bureau (PIB) issued a statement confirming that: “Claims that the Government is considering levying GST on UPI transactions over ₹2,000 are completely false, misleading, and without any basis.” As of this date, no such proposal exists before the government to impose GST on such transactions. Why the Confusion? GST is applicable on service charges, including the Merchant Discount Rate (MDR), which is a fee paid by merchants to banks for processing digital payments. However, since: MDR on Person-to-Merchant (P2M) UPI transactions was removed effective January 1, 2020, through Gazette Notification dated December 30, 2019; No MDR is currently levied on such UPI transactions, it follows that no GST is applicable on these transactions. Government’s Continued Support for Digital Payments Rather than introducing tax burdens, the Government of India has demonstrated active support for the growth of UPI as a preferred digital payment channel. A targeted Incentive Scheme has been in operation since FY 2021–22 to promote low-value P2M UPI payments, with the following allocations: FY 2021–22: ₹1,389 crore FY 2022–23: ₹2,210 crore FY 2023–24: ₹3,631 crore This scheme has been beneficial for small merchants, promoting broader adoption and enhancing the reach of India’s digital infrastructure. India’s Global Leadership in Real-Time Digital Transactions According to the ACI Worldwide Report 2024, India continues to lead globally in digital payments: Accounted for 49% of global real-time digital transactions in 2023 UPI transaction volume grew from ₹21.3 lakh crore in FY 2019–20 to ₹260.56 lakh crore by March 2025 P2M transactions alone accounted for ₹59.3 lakh crore This growth underscores increased merchant integration and public trust in digital payment systems. Conclusion The Government has categorically stated that there is no GST applicable on UPI transactions, including those exceeding ₹2,000 in value. This clarification highlights the commitment to preserving the zero-cost structure for users and merchants, and encouraging further adoption of secure, real-time, and cashless payment modes in India. Stakeholders are advised to rely on official sources and verified notifications for any updates on taxation policies, and to avoid acting on unverified information or speculative news. Disclaimer: The content of the blog does not create any responsibility of the firm / its authorized persons whose website is being accessed. The blog is not for legal use. Kindly verify the correctness of data/contents from your own sources. This is only for information purpose. Add a Comment Name: Your Comment: View Comments (0)

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