UPI GST: There are several reports on social media that the Government of India is planning to impose 18% GST on UPI payments. As per reports, The Indian government is currently considering a proposal to impose Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions that exceed ₹2,000. According to media reports, this plan is still under review and has not yet been officially approved.
But What’s the Truth? What Government Said?
The Government of India has finally come up with an answer and has confirmed that no GST will be imposed on UPI payments above Rs.2000. The Press Information Bureau (PIB) has released an official communication regarding GST on UPI and has said that:
Recent claims suggesting that the Government is considering imposing Goods and Services Tax (GST) on UPI transactions exceeding ₹2,000 are entirely false, misleading, and baseless. No such proposal is under consideration by the Government.
GST is applicable only on charges like the Merchant Discount Rate (MDR) associated with specific payment instruments. However, since January 2020, the Central Board of Direct Taxes (CBDT), through a Gazette Notification dated 30th December 2019, has removed MDR on Person-to-Merchant (P2M) UPI transactions. As a result, with no MDR being charged, GST is not applicable on UPI transactions.
The Government is fully committed to promoting digital payments through UPI. To support this, a dedicated Incentive Scheme for low-value UPI (P2M) transactions has been in place since FY 2021–22. This scheme eases transaction costs for small merchants and fosters greater adoption and innovation in digital payments. The government has allocated incentive funds for various years which are as follows:
- FY 2021–22: ₹1,389 crore
- FY 2022–23: ₹2,210 crore
- FY 2023–24: ₹3,631 crore
The Government has said that these initiatives have significantly strengthened India’s digital payment ecosystem. According to the ACI Worldwide Report 2024, India accounted for 49% of global real-time transactions in 2023, underscoring its leadership in digital payments innovation.
Government also said that UPI transactions have witnessed exponential growth — from ₹21.3 lakh crore in FY 2019–20 to ₹260.56 lakh crore by March 2025. Notably, P2M transactions have surged to ₹59.3 lakh crore, highlighting increased merchant participation and rising consumer trust in digital platforms.
The Ministry of Finance also shared a post on social media platform X (Formerly Twitter) and said that the news of GST on UPI is completely baseless. The Finance Ministry said that no GST will be imposed on UPI.
Thus, it can be said that as of now, no GST is being imposed on UPI Payments above Rs.2000. For more such news join our whatsapp group. Click here to join whatsapp group.
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