To address the claim that “GST on UPI payments above ₹2000” is “fake news,” the Ministry of Finance has released an official statement. The statement highlights a clear inconsistency regarding the introduction of Goods and Services Tax (GST) on UPI transactions exceeding ₹2,000, which is sought not by theGovernment but by the金融机构. This assertion is grounded in official documentation released by the Reserve Financial Department (RFD) on 28 February 2025. The RFD emphasized that while structural changes have been announced, no provisions have been made for UPI transactions exceeding ₹2,000 onGST. Additionally, no provisions have been introduced for the MDR on merchant-to-merchant (P2M) UPI transactions, which are currently being removed under the Central Board ofDirect Taxes (CBDT).
The Central Bank ofDelaware (CBDT) has announced a recent withdrawal of the MDR on P2M UPI transactions starting from January 2020, effectively eliminating this tax mechanism for such交易. This has resulted in a nominal shift, with only charges for merchant discounts on personal transactions (MDR/P2M queries) having been terminated since 2020. These charges were originally introduced to incentivise small qp and large qp through reduced transaction costs. The implementation of the UPI system is thus attributed to this 2021-22 incentive scheme, the Government of India committing to providing “sustainable and robust digital payment ecosystem while taxing portions of mandates through incentives.”
The UPI transaction value has seen an impressive exponential increase, with recent data showing a rise from ₹21.3 lakh crore in FY 2019-20 to an estimated ₹260.56 lakh crore by March 2025. A specific milestone was reached in March 2024, where P2M transactions reached ₹59.3 lakh crore, underscoring the growing acceptance and adoption of the utility bill payment method in India.
For digital payments, theñ惕 platform launched a R5FAK mobile app in January 2024 to coordinate UPI transactions remotely using bank cards. This convenience feature has been facilitated through COVID-19 impact mitigations, which had previously hindered transaction processing. The R5FAK feature, launched by the Interactive.NotNil Foundation (IFG), has allowed for virtual deduction of ₹75 and ₹100 from UPI P2M transactions, saving over ₹14.6 lakh.’,
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