No GST on UPI transactions over ₹2,000, clarifies government 2025 best
The Indian government has officially clarified that there is no Goods and Services Tax (GST) applicable on Unified Payments Interface (UPI) transactions exceeding ₹2,000. No GST on UPI transactions over ₹2,000, clarifies government 2025 best This announcement comes in response to recent rumors suggesting the imposition of GST on such transactions.
Government’s Clarification
On April 18, 2025, the Ministry of Finance issued a statement categorically denying any plans to levy GST on UPI transactions over ₹2,000. The ministry labeled these claims as “completely false, misleading, and without any basis.” They emphasized that there is currently no proposal under consideration to impose such a tax. citeturn0search0
Understanding GST and UPI Transactions
GST is typically levied on services and goods, including charges like the Merchant Discount Rate (MDR), which is a fee paid by merchants to banks or payment service providers for processing transactions. However, since January 2020, No GST on UPI transactions over ₹2,000, clarifies government 2025 best the Central Board of Direct Taxes (CBDT) has removed the MDR on person-to-merchant (P2M) UPI transactions. No GST on UPI transactions over ₹2,000, clarifies government 2025 best Consequently, as there is no MDR on these transactions, GST is not applicable. citeturn0search0
Government’s Commitment to Digital Payments
The government remains committed to promoting digital payments through UPI. No GST on UPI transactions over ₹2,000, clarifies government 2025 best To support this initiative, an incentive scheme has been operational since the fiscal year 2021-22, targeting low-value UPI (P2M) transactions. No GST on UPI transactions over ₹2,000, clarifies government 2025 best This scheme benefits small merchants by alleviating transaction costs and encouraging wider participation in digital payments. 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
- No GST on UPI transactions over ₹2,000, clarifies government 2025 best
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Conclusion
In summary, the government has no plans to impose GST on UPI transactions exceeding ₹2,000. No GST on UPI transactions over ₹2,000, clarifies government 2025 best The existing framework continues to support and encourage digital transactions without additional tax burdens on users.
For more detailed information, No GST on UPI transactions over ₹2,000, clarifies government 2025 best you can refer to the official statement by the Ministry of Finance: linkturn0search0.
