Will GST be paid on UPI transactions of more than 2000? Has the government really announced this?

GST on UPI transactions: Social media and some platforms are being claimed that the central government is considering imposing GST on UPI transactions worth more than Rs 2000. However, the government has completely rejected these claims and said that this news is completely false, misleading and baseless. The Finance Ministry said on Friday that the government did not have any such proposal.

The Finance Ministry has clarified that GST is levied only on fees related to service fee (eg merchant discount rate -MDR) levied through payment gateways or other means. However, since January 2020, CBDT has removed MDR on P2M (Person to Merchant) UPI transactions, which means no additional fee will be imposed on UPI payment. Therefore, there is no question of imposing GST.

The Finance Ministry said that the government aims to promote digital payments, especially UPI. Under this, the UPI incentive scheme has been implemented from the financial year 2021-22, which especially encourage P2M transactions of small amount.

Incentives given by the government so far under this scheme
• Financial Year 2021-22: ₹ 1,389 crore
• Financial Year 2022-23: ₹ 2,210 Crore
• Financial Year 2023-24: ₹ 3,631 Crore

These figures show that the government is continuously investing in encouraging small businesses and common consumers to adopt digital payments.

India is becoming a pioneer in digital payment.
According to the ACI Worldwide Report 2024, India will have 49% stake in the world’s total real-time transactions in 2023, which proves that India has become a global leader in the field of digital payments.

There has also been a tremendous increase in the amount of UPI transactions. It has increased from ₹ 21.3 lakh crore in FY 2019-20 to ₹ 260.56 lakh crore by March 2025. Out of this, the P2M transaction has reached ₹ 59.3 lakh crore, which reflects the increasing trust in digital payment between both traders and consumers.