“There is no such proposal under consideration,” the government clarified in an official press release.
UPI payments, especially those made to merchants, currently don’t attract any extra charges like GST. That’s because the government had already removed the Merchant Discount Rate (MDR) – a fee usually charged on digital payments – for such transactions back in January 2020. Since there’s no MDR, there’s no GST either.
The government also highlighted its strong push for digital payments through UPI. To make it easier for small shopkeepers and businesses to accept UPI payments, a special incentive scheme has been in place since 2021. Under this scheme, the government rewards service providers to cover transaction costs and encourage more people to use UPI.
The scheme’s payouts show how serious the government is about promoting digital payments: Rs 1,389 crore in 2021-22, Rs 2,210 crore in 2022-23, and Rs 631 crore in 2023-24.
The government said that these payments have led to a massive growth in digital payments in India. According to a report by ACI Worldwide, India handled 49% of all real-time digital transactions globally in 2023.
