On Friday, April 18, 2025, the Government made it clear that there is no plan to charge GST on UPI payments above ₹2,000. This statement came after some reports wrongly claimed that such a tax was being considered.
The Finance Ministry said these reports are completely false and have no truth. “There is no such proposal before the government,” the Ministry stated.
GST (Goods and Services Tax) is only charged on specific fees like the Merchant Discount Rate (MDR), which is applied to certain types of digital payments.
But here’s the important part: Since January 2020, the MDR has been removed for UPI payments made from a person to a merchant. So, no MDR means no GST on these UPI transactions.
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UPI usage has grown massively, from ₹21.3 lakh crore in 2019-20 to ₹260.56 lakh crore by March 2025.
The Ministry also said the government is fully committed to encouraging UPI and digital payments.
To support this, a special incentive scheme started in 2021-22. It focuses on low-value UPI payments to small merchants, helping cover their costs and encourage more people to use UPI.
In 2023-24, the government spent ₹3,631 crore on this scheme—up from ₹2,210 crore in 2022-23.
“The money spent through this scheme shows our strong support for UPI and digital payments,” the Ministry added.
In short: No GST on UPI payments over ₹2,000, and the government is actively supporting UPI growth.
