Gst on upi: For the last several days, it is being claimed on social media that the government will now impose GST on transactions of more than Rs 2,000 in UPI. However, the government has now clarified on the issue that such claims are baseless and misleading. The Finance Ministry said in an official statement, ‘There are claims that the government is considering imposing goods and service tax (GST) on UPI transactions worth more than Rs 2,000, completely false, misleading and baseless. At present, there is no such proposal before the government.
The Finance Ministry further stated that ‘GST is levied on fees like merchant discount rate (MDR) related to payment made through some equipment.
GST on UPI
The Finance Ministry said, “At present, no MDR is imposed on UPI transactions. Therefore, no GST is applicable to this transaction. The government is committed to promoting digital payments through UPI.
The Finance Ministry denied these reports.
The Finance Ministry said that the payment made using GST is charged the same fee as the relevant merchant discount rate (MDR). Effective since January 2020, the Central Board of Direct Taxes (CBDT) has removed the MDR on a merchant (P2M) UPI transaction from a person through the Gazette notification of December 30, 2019.
Since no MDR is currently imposed on UPI transactions, no GST is applicable. The government is committed to promoting digital payments through UPI. In order to support and maintain the development of UPI, the incentive scheme operated by the government is running from the financial year 2021-22.
The Finance Ministry said that the scheme targets the low -cost UPI (P2M) transaction, which will benefit smaller traders from low transactions and promote extensive participation in digital payments and innovation.
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