The Ministry of Finance has firmly debunked recent misinformation suggesting that the Government is considering levying Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions above ₹2,000. In an official press release dated April 18, 2025, the Government stated that such claims are entirely false, misleading, and baseless.
Currently, there is no proposal under consideration to impose GST on UPI transactions. GST is applicable only on specific service charges, such as the Merchant Discount Rate (MDR), but since January 2020, the MDR on Person-to-Merchant (P2M) UPI transactions has been completely removed via Gazette Notification dated December 30, 2019. As a result, no GST applies to these transactions either.
To further promote the adoption of UPI and digital payments, the Government has introduced an Incentive Scheme targeting low-value P2M transactions. This initiative has significantly reduced costs for small merchants and encouraged greater participation in the digital economy. The scheme’s allocations over the past three financial years underscore this commitment:
- FY 2021-22: ₹1,389 crore
- FY 2022-23: ₹2,210 crore
- FY 2023-24: ₹3,631 crore
India continues to lead globally in digital transactions. According to the ACI Worldwide Report 2024, India accounted for 49% of all real-time digital payments in 2023.
The volume and value of UPI transactions have also surged, with total transaction value growing from ₹21.3 lakh crore in FY 2019-20 to ₹260.56 lakh crore by March 2025. P2M transactions alone reached ₹59.3 lakh crore—highlighting increasing merchant adoption and consumer trust.
The Government reaffirms its commitment to fostering a robust, inclusive, and innovation-driven digital payments ecosystem.