Government does not consider collecting GST on UPI transactions above Rs 2,000: Finmin
New Delhi: The government clarified on Friday that this is not to impose a GST levy on UPI transactions of more than Rs 2,000. The report said the government said it was considering a UPI transaction of Rs 2,000 and the Ministry of Finance said they were completely wrong, misleading and had no basis.
“At present, the government has no such proposal,” the ministry said in a statement.
Fees for GST (such as Merchant Discount Rate (MDR)) related to payments made using certain tools.
Starting in January 2020, the Central Direct Taxation Commission (CBDT) has removed the MDR (P2M) UPI transactions between people.
“Since there is no MDR charged for UPI transactions at present, it is not applicable to these transactions,” the ministry said.
The UPI transaction value has grown exponentially, from Rs 21.3 billion in fiscal 2019-20 to Rs 26,056 crore from March 2025 to March 2025.
The ministry also said the government remains committed to facilitating digital payments through UPI.
To support and maintain UPI growth, an incentive program that operates from FY2021-22. The program is specifically targeted at low value UPI (P2M) transactions, benefiting small merchants by reducing transaction costs and promoting wider participation and innovative digital payments.
In 2023-24, the government paid Rs 3,631 crore under the scheme, up from Rs 2,21 crore in 2022-23.
“For years, incentive spending under the scheme reflects the government’s ongoing commitment to promoting UPI-based digital payments,” the ministry noted.
