Government Denies Plans to Impose GST on UPI Transactions Over ₹2,000
Government Denies Plans to Impose GST on UPI Transactions Over ₹2,000
New Delhi, April 18, 2025 – The Government of India has categorically denied reports suggesting the imposition of Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions exceeding ₹2,000. In an official statement released by the Press Information Bureau (PIB), the Ministry of Finance clarified that such claims are “completely false, misleading, and without any basis.”
No Current Proposal for GST on UPI Transactions
The government emphasized that there is no proposal under consideration to levy GST on UPI payments. Currently, GST applies only to charges like the Merchant Discount Rate (MDR) on certain payment instruments. However, since January 2020, MDR has been waived on UPI-based Person-to-Merchant (P2M) transactions, meaning no GST is applicable on such transactions.
Government’s Push for Digital Payments
Reiterating its commitment to boosting digital payments, the government highlighted the Incentive Scheme for Low-Value UPI Transactions, operational since FY 2021-22. This initiative supports small merchants by reducing transaction costs and encouraging wider adoption of digital payments. Key allocations under the scheme include:
- FY 2021-22: ₹1,389 crore
- FY 2022-23: ₹2,210 crore
- FY 2023-24: ₹3,631 crore
India Leads Global Digital Payments
India continues to dominate the global real-time payments landscape, accounting for 49% of such transactions in 2023 (ACI Worldwide Report 2024). UPI has witnessed exponential growth, with transaction values surging from ₹21.3 lakh crore in FY 2019-20 to ₹260.56 lakh crore by March 2025. Notably, P2M transactions alone reached ₹59.3 lakh crore, showcasing rising merchant trust in digital payments.
Conclusion
The government has dismissed the GST rumors as baseless, reaffirming its focus on strengthening India’s digital economy. With UPI’s rapid expansion, authorities remain committed to ensuring a seamless, cost-effective digital payments ecosystem.
