Goods & Service Tax (GST) 17 September 2026
UPI MDR to Face 18% GST on Payments Over Rs 2000
The finance ministry is considering an 18% Goods and Services Tax on the Merchant Discount Rate for UPI transactions that exceed Rs 2000. Merchants would see higher fees on larger digital payments, potentially affecting pricing and adoption of high‑value UPI transfers. The move aims to boost tax revenue but could increase transaction costs for businesses, prompting them to reassess their payment strategies.
Update: The government may levy an 18% GST on the Merchant Discount Rate (MDR) for UPI transactions exceeding Rs 2000.
- MDR is the fee merchants pay per transaction.
- The new tax applies only to payments above the Rs 2000 threshold.
- This could increase costs for merchants handling larger digital payments.
Need help understanding this update?
Connect with our domain experts instantly via WhatsApp for customized legal guidance.