Government Clarifies No GST on UPI Transactions Above Rs 2,000

NEW DELHI: The government has officially denied any plans to levy Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions exceeding Rs 2,000. This clarification comes in response to misleading reports suggesting otherwise.

The finance ministry emphasized that these reports are baseless and incorrect. GST is currently applied only to charges like the Merchant Discount Rate (MDR) for certain payment methods. Since January 2020, the Central Board of Direct Taxes (CBDT) has eliminated MDR for person-to-merchant UPI transactions, making GST irrelevant for these transactions.

The ministry highlighted the significant growth in UPI transaction values, which have soared from Rs 21.3 lakh crore in 2019-20 to an impressive Rs 260.6 lakh crore by March 2025.