Goods & Service Tax (GST) 17 September 2026
18% GST Added to UPI MDR Raises Merchant Costs
Effective October 15, the Indian government will impose an 18% Goods and Services Tax on the Merchant Discount Rate (MDR) for UPI transactions exceeding ₹2,000. This change adds a significant tax layer to already existing fees, increasing the overall cost burden on merchants and potentially influencing pricing strategies for digital payments. The move reflects ongoing efforts to boost tax revenue from the rapidly growing electronic payment ecosystem.
Effective Oct 15, an 18% GST will be charged on the UPI Merchant Discount Rate (MDR) for transactions above ₹2,000, raising the cost for merchants.
- 18% GST applied directly to MDR
- Applies only to payments > ₹2,000
- Merchants will see higher transaction fees, which may affect pricing and adoption
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