The Central Government has made it clear that there will be no GST (Goods and Services Tax) on UPI (Unified Payments Interface) transactions, even if the amount is over Rs 2,000.
Recently, many social media posts claimed that UPI payments above Rs 2,000 would be taxed under GST. This created confusion among regular users and small businesses. However, the Central Board of Indirect Taxes & Customs (CBIC) has called these claims completely false and baseless.
Why There’s No GST on UPI
Here’s what the government explained:
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UPI payments do not have GST because there’s no MDR (Merchant Discount Rate) being charged on them.
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MDR was officially removed for Person-to-Merchant (P2M) UPI payments in January 2020, so there's no GST applicable either.
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Since no extra fees are being collected, there is nothing to tax.
Government Supports UPI, Doesn’t Tax It
Instead of taxing UPI, the government has been promoting digital payments. It even provides financial support through a UPI Incentive Scheme:
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FY 2021-22: Rs 1,389 crore
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FY 2022-23: Rs 2,210 crore
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FY 2023-24: Rs 3,631 crore
This helps merchants cover their costs and motivates more businesses to accept UPI.
UPI’s Massive Growth in India
UPI has become one of the most used digital payment systems in the world. Here are some key facts:
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In March 2025, UPI payments hit Rs 24.77 lakh crore, a 12.7% jump from February.
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Compared to last year, March 2025 saw a 25% rise in value and a 36% rise in transaction volume.
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According to the ACI Worldwide Report 2024, India made up 49% of all real-time payments in the world in 2023.
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UPI payments grew from Rs 21.3 lakh crore in FY 2019-20 to a whopping Rs 260.56 lakh crore in FY 2024-25.
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P2M payments alone reached Rs 59.3 lakh crore, showing how small businesses are embracing digital transactions.
The claims that the Government is considering levying GST on UPI transactions over ₹2,000 are completely false, misleading, and without any basis.
— CBIC (@cbic_india) April 18, 2025
👉Currently, there is no such proposal before the government.
👉GST is levied on charges, such as the Merchant Discount Rate…
✅ Bottom Line
You can continue using UPI without worrying about GST, even for amounts above Rs 2,000. The government has no plans to add any such tax, and it’s focused on growing India’s digital economy.
