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The Government on Friday (April 18, 2025) clarified that it is not considering imposing UPI transactions above ₹ 2,000.
Clarifying the reports, which said that the Government is considering imposing the tax on goods and services (GST) in UPI transactions in ₹ 2,000, the Ministry of Finance said they are completely false, deceased and without any basis.
“Currently, there is no such proposal before the Government,” the ministry said in a statement.
GST is collected by charges, such as the commercial discount rate (MDR), in relation to payments made with certain instruments.
As of January 2020, the Central Board of Direct Taxes (CBDT) has eliminated the MDR in the UPI to Mercantile transactions (P2M).
“Since MDR is currently not charged in UPI transactions, there is constantly gst applicable to these transactions,” said the ministry.
The UPI transaction values have seen an exponential increase, growing from ₹ 21.3 Lakh million rupees in fiscal year 2019-20 to ₹ 260.56 Lakh Crore in March 2025.
The Ministry also said that the government is still committed to digital promotion payments through UPI.
To support and maintain the growth of UPI, an incentive scheme has been operational since fiscal year 2021-22. This scheme is specifically directed to low -value UPI (P2M) transactions, benefiting small merchants by relieving transaction costs and promotion and greater participation and innovation in digital payments.
In 2023-24, the Government paid ₹ 3,631 million rupees under the scheme, compared to ₹ 2,210 million rupees in 2022-23.
“Total incentive payments under this scheme about the years reflect the government’s sustained commitment to the promotion of UPI -based digital payments,” said the ministry.
Published – April 18, 2025 10:08 PM IST