💸 No GST on UPI Transfers Over ₹2K! Govt Busts the Rumours 🚫📲
- MediaFx
- 3 days ago
- 2 min read
TL;DR: The Indian government has clarified that there is no plan to impose GST on UPI transactions exceeding ₹2,000. Rumors suggesting such a tax are baseless. Since the Merchant Discount Rate (MDR) is waived for UPI transactions, GST doesn't apply. The government continues to promote digital payments, allocating significant funds to support UPI's growth.
🚨 UPI Users, Chill! No GST on Your ₹2K+ Transactions 🚨
Recently, social media was buzzing with claims that the government planned to levy an 18% GST on UPI transactions over ₹2,000. This caused panic among users and small merchants. However, the Ministry of Finance has debunked these rumors, stating that no such proposal exists.
📜 The Official Word from the Government
In a statement, the Ministry clarified:
"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."
They further explained that GST is applicable on charges like the Merchant Discount Rate (MDR), which has been waived for UPI transactions since January 2020. Therefore, no GST applies to these transactions.
💰 Government's Commitment to Digital Payments
To promote digital payments, especially UPI, the government has been running an Incentive Scheme since FY 2021-22. This scheme targets low-value Person-to-Merchant (P2M) UPI transactions, benefiting small merchants by covering transaction costs. The allocations under this scheme have been:
FY 2021-22: ₹1,389 crore
FY 2022-23: ₹2,210 crore
FY 2023-24: ₹3,631 crore
📊 India's Dominance in Digital Transactions
According to the ACI Worldwide Report 2024, India accounted for 49% of global real-time transactions in 2023, reaffirming its position as a leader in digital payments innovation. UPI transaction values have seen exponential growth, increasing from ₹21.3 lakh crore in FY 2019-20 to ₹260.56 lakh crore by March 2025.
🛠️ MediaFx's Take
While the government's clarification is reassuring, the spread of such rumors highlights the need for transparent communication. It's essential to ensure that digital payment systems remain accessible and free from additional charges, especially for the working class and small merchants who rely heavily on UPI. Continued support and clear communication from the authorities are vital to maintain trust and promote financial inclusion.
