LatestGoods & Service Tax (GST) 18 September 2026
GST on UPI MDR Clarified for Merchants
The government and courts have clarified that GST will be levied on the Merchant Discount Rate (MDR) for UPI payments, but the tax burden falls on merchants, not customers. The MDR is capped at Rs 300 for transactions above Rs 75,000, and recent legal rulings reinforce the application of GST without additional charges to end‑users, while unrelated GST disputes continue in other sectors.
Recent government clarifications confirm that GST applies to the Merchant Discount Rate (MDR) on UPI transactions, but the tax is payable by merchants, not passed on to consumers. The MDR is capped at Rs 300 for payments of Rs 75,000 or more.
- GST on MDR – details in the fact‑check article: Fact Check – GST on UPI MDR
- No extra GST for customers – NDTV report: UPI fees won’t pass to customers
- Government source on pressure – Economic Times: MDR not imposed due to external pressure
- Related GST rulings – Delhi High Court portal error: GST portal error case
- Supplementary GST refund guidance – GSTAT ruling: Supplementary GST refund claim
These updates confirm that merchants will absorb the GST on MDR, while other GST matters such as e‑way bill fraud and ESOP deductions proceed in separate legal channels.
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