The Government has clearly said that the news about adding GST (Goods and Services Tax) on UPI payments above ₹2,000 is completely false and baseless. There is no such proposal. In the PIB Ministry of Finance release official statement said that, “The claims that the Government is considering levying Goods and Services Tax (GST) on UPI transactions over ₹2,000 are completely false, misleading, and without any basis.Currently, there is no such proposal before the Government.”
In a press release, the Ministry of Finance said there is no such proposal being considered, and people should not believe in rumors.
Why There Is No GST on UPI ?
GST is only charged on service fees like Merchant Discount Rate (MDR), relating to payments made using certain instruments. But since January 2020, there has been no MDR on UPI payments from person to merchant as the Central Board of Direct Taxes (CBDT) has removed MDR. So, because there is no fee, there is no GST on these UPI transactions.
Government Supports Digital Payments
The Government wants to make digital payments easier and more popular, especially for small shopkeepers and vendors. “The Government remains committed to promoting digital payments via UPI”. To support and sustain the growth of UPI government started UPI Incentive Scheme from 2021-22 to help reduce the costs of digital payments for small businesses.
The total incentives given under this scheme over the years show the Government’s strong and ongoing support for UPI-based digital payments. Here’s how much was allocated each year:
- FY 2021-22: ₹1,389 crore
- FY 2022-23: ₹2,210 crore
- FY 2023-24: ₹3,631 crore
India Leads the World in Digital Payments
As per the ACI Worldwide Report 2024, India made 49% of all real-time digital payments in the world in 2023. This proves that India is a global leader in digital payment systems.
UPI payments in India have grown rapidly, from ₹21.3 lakh crore in 2019-20 to ₹260.56 lakh crore by March 2025.
Conclusion:
The Government has confirmed that there is no plan to add GST on UPI payments. People are advised not to trust fake news on social media. The Government will continue to support UPI and digital India.
