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Govt Denies GST on UPI; March Collections Surge
The Business Guardian
|April 19, 2025
To support and sustain the growth of UPI, an Incentive Scheme has been operational from 2021-22.
The claims that the government is considering levying Goods and Services Tax (GST) on UPI transactions over Rs 2,000 are completely false, misleading, and without any basis, said the Ministry of Finance in a statement Friday.
Currently, there is no such proposal before the government, the Finance Ministry clarified.
GST is levied on charges, such as the Merchant Discount Rate (MDR), relating to payments made using certain instruments.
Effective January 2020, the Central Board of Direct Taxes (CBDT) removed the Merchant Discount Rate (MDR) on Person-to-Merchant (P2M) UPI transactions through a Gazette Notification dated December 30, 2019.
Since no MDR is currently charged on UPI transactions, there is consequently no GST applicable.
The Finance Ministry said the government remains committed to promoting digital payments via UPI.
To support and sustain the growth of UPI, an Incentive Scheme has been operational from 2021-22.
This story is from the April 19, 2025 edition of The Business Guardian.
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