Reports were circulating on social media that the central government is planning to impose GST on UPI transactions worth more than Rs 2000. This news has increased the concerns of various UPI users, including individual users and small businesses. Now, the Indian Finance Ministry has issued a clarification on this. The ministry has said that such claims are completely false, misleading and baseless.
No GST will be Levied on UPI Transactions Above Rs 2000
There was talk of imposing GST on UPI transactions worth more than Rs 2000. Following a debate on social media, the Central Board of Indirect Taxes and Customs (CBIC) put up a clarification on social media platform X. The claim that the central government is considering imposing GST on UPI transactions exceeding Rs 2,000 is completely false, misleading and baseless. Currently, there is no such proposal before the government. GST is levied on charges like Merchant Discount Rate (MDR) associated with payments made using certain devices. With effect from January 2020, CBDT has removed MDR on Person-to-Business (P2M) UPI transactions vide a gazette notification dated 30 December 2019. The post states that since no MDR is currently levied on UPI transactions, no GST will be levied on these transactions.
UPI Transactions have Witnessed Rapid Growth
India’s UPI has set a new benchmark in real-time digital payments. According to data from the National Payments Corporation of India (NPCI), transactions through UPI reached a new high in March, totaling Rs 24.77 lakh crore. This is a 12.7% increase over the previous month’s total of Rs 21.96 lakh crore.NPCI also reported that the value of UPI transactions in March 2025 was significantly higher than the same month last year, totaling Rs 24.77 lakh crore as against Rs 19.78 lakh crore. Along with this, UPI transactions in March 2025 saw a 25% increase in value and a 36% increase in volume.
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