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There were several media reports claiming that digital payments that cross Rs 2000 threshold might attract an 18 per cent GST, the standard rate for most digital services.
As per media reports, digital payments that cross this threshold might attract an 18 per cent GST, the standard rate for most digital services.
The government has refuted the claims that it is evaluating a proposal to impose goods and services tax (GST) on high-value UPI transactions exceeding Rs 2,000, saying these are “completely false, misleading, and without any basis.”
The Central Board of Indirect Taxes & Customs (CBIC) on Friday said that there is no such proposal before the government. It further said that GST is levied on charges, such as the Merchant Discount Rate (MDR), relating to payments made using certain instruments.
In a long post on X, CBIC said, “The claims that the Government is considering levying GST on UPI transactions over ₹2,000 are completely false, misleading, and without any basis. Effective January 2020, the CBDT has removed the MDR on Person-to-Merchant (P2M) UPI transactions through the Gazette Notification dated 30th December 2019. Since currently no MDR is charged on UPI transactions, there is consequently no GST applicable to these transactions”
The claims that the Government is considering levying GST on UPI transactions over ₹2,000 are completely false, misleading, and without any basis.👉Currently, there is no such proposal before the government.
👉GST is levied on charges, such as the Merchant Discount Rate…
— CBIC (@cbic_india) April 18, 2025
There were several media reports claiming that digital payments that cross Rs 2000 threshold might attract an 18 per cent GST, the standard rate for most digital services.
Meanwhile, last month, the Union Cabinet, headed by Prime Minister Narendra Modi, approved a Rs 1,500-crore incentive scheme to promote low-value BHIM-UPI P2M transactions for small merchants. As per this scheme, all person-to-merchant (P2M) transactions for small merchants up to Rs 2,000 will be eligible for zero cost or MDR and an incentive at the rate of 0.15%.
The scheme will be implemented for one year between April 1, 2024, and March 31, 2025.
In March 2025, Gross GST collection grew 9.9 per cent in March to over Rs 1.96 lakh crore – the second-highest mop-up ever. GST revenue from domestic transactions rose 8.8 per cent to Rs 1.49 lakh crore, while revenue from imported goods was higher 13.56 per cent to Rs 46,919 crore.