UPI Payments Above Rs 2,000 Could Soon Cost 18% More
The government is considering imposing an 18% GST on UPI transactions exceeding Rs 2,000.
Government Evaluating GST on High-Value UPI Payments
The government is looking into a proposal that could bring GST into play for both peer-to-peer (P2P) and merchant UPI transactions above Rs 2,000.
Proposal in Evaluation
18% GST: Standard Rate for Digital Transactions
18% GST is the standard rate for most digital services, and UPI transactions above Rs 2,000 could fall under this tax bracket.
GST Rate for Digital Services
No Official Confirmation Yet
Title: ‘Jinguchaa’Music by AR Rahman, Lyrics by Kamal Haasan.No Confirmation from Government YetAs of now, there’s no official confirmation regarding the proposal, and it is still under evaluation.
Impact on Small Transactions
Small Transactions to Be Exempt from GST
Transactions below Rs 2,000, especially those made by small merchants, will likely remain unaffected by this proposed GST.
Government's Incentive Scheme
Rs 1,500-Crore Scheme for Small Merchants
The government has approved a Rs 1,500 crore incentive scheme to boost low-value BHIM-UPI P2M transactions for small merchants.
Scheme Details
Zero Cost for Small Merchants' Transactions Up to Rs 2,000
Small merchant transactions up to Rs 2,000 will be eligible for zero MDR costs and a 0.15% incentive under the scheme.
Scheme Duration
Scheme Runs Until March 31, 2025
The Rs 1,500 crore scheme will be active from April 1, 2024, to March 31, 2025, promoting the use of UPI among small merchants.
Recent GST Revenue Growth
GST Collection Grows in March 2025
GST revenue saw a 9.9% growth in March 2025, reaching Rs 1.96 lakh crore, driven by strong domestic and imported goods revenue.
What’s Next?
Will the GST Proposal Be Approved?
The future of the 18% GST on high-value UPI transactions now depends on the final decision from the government.