New Delhi, April 18 -- The Finance Ministry on Friday dismissed reports claiming the government is considering imposing GST on UPI transactions above Rs 2,000. In an official statement, the ministry termed such claims "false, misleading and without any basis".
"There is no such proposal under consideration," the statement clarified, addressing concerns that surfaced following speculative reports earlier this week.
The clarification comes amid growing digital payment volumes. Unified Payments Interface (UPI) has witnessed a significant surge in usage, with transaction values jumping from Rs 21.3 lakh crore in 2019-20 to Rs 260.56 lakh crore as of March 2025.
According to the ministry, Goods and Services Tax is applicable only on specific service charges, such as the Merchant Discount Rate (MDR), where it exists. "Since currently no MDR is charged on UPI transactions, there is consequently no GST applicable to these transactions," it said.To encourage adoption, the government has been running an incentive scheme since FY 2021-22 for person-to-merchant UPI payments. Under this initiative, Rs 3,631 crore was disbursed in FY 2023-24, up from Rs 2,210 crore the previous year.
The ministry reiterated its focus on supporting small merchants and expanding the digital ecosystem through sustained policy measures.
Published by HT Digital Content Services with permission from Millennium Post.