Goods & Service Tax (GST) 17 September 2026
18% GST Added to UPI Merchant Discount Rate
From October 15, the Indian government will levy an 18% Goods and Services Tax on the Merchant Discount Rate (MDR) for UPI transactions exceeding ₹2,000. This tax is applied to the MDR itself, not the transaction amount, raising costs for merchants and ending earlier confusion where officials had said no GST would be charged on high‑value UPI payments. The change aims to standardize tax treatment across digital payments and will affect businesses that rely on UPI for larger sales.
New GST on UPI MDR
- From Oct 15, merchants pay 18% GST on the Merchant Discount Rate (MDR) for UPI payments above ₹2,000.
- The charge is applied on the MDR itself, raising transaction costs for businesses.
- The government earlier denied GST on high‑value UPI payments, leading to confusion; the latest rule clarifies the tax applies to the MDR, not the payment amount.
For full details see the Daily Excelsior report here.
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