Will GST be levied on UPI payments above Rs 2,000? Government clearly denies|
It is going viral on social media and some news reports that GST can be levied on UPI transactions above Rs 2,000. But on 18 April, the government said on this news that “This news is false, wrong and without any basis.”
What did the government say?
The Finance Minister said that no such proposal has come before the government so far. There is no GST on UPI as of now, MDR (Merchant Discount Rate) is also not applicable on it. In January 2020 itself, the government had removed MDR on UPI P2M (Person to Merchant) transactions. So if there is no MDR, then GST is not applicable on it.
What is the connection between MDR and GST?
MDR is a small processing fee that is charged from merchants for digital payments. When this fee was quoted, GST was applicable on it. But now
No MDR on UPI P2M payments
So, No GST too
The government’s focus is to promote digital payments
In FY 2021-22, the government also launched an Incentive Scheme, whose goal was to make UPI payments popular, especially among small merchants.
The data of incentives was something like this:
FY 2021-22 – Rs 1,389 crore
FY 2022-23 – Rs 2,210 crore
FY 2023-24 – Rs 3,631 crore
And the government has shown who strongly supports UPI growth.
UPI growth story – India became a world leader
In FY 2019-20, the total value of UPI was Rs 21.3 lakh crore.
In FY 2024-25, it increased to Rs 260.56 crore.
The value of only P2M transactions has also reached Rs 59.3 lakh crore. And according to ACI Worldwide Report 2024, India made 49% of the world’s real-time digital payments in 2023, becoming a global champion.
Read More:Khauf Review: When fear is not only from ghosts, but also from humans.
What is the truth of the rumours?
Media reports are saying that 18% GST can be imposed on UPI payments of Rs 2,000 so that digital transactions can be brought under tax.
But:
Till now the government has not accepted any such proposal.
The Finance Minister has called this thing “completely false“.
