New Delhi [India], April 18 (ANI): The assertions that the administration is contemplating imposing Goods and Services Tax The Ministry of Finance stated on Friday that claims regarding GST on UPI transactions exceeding Rs 2,000 being entirely baseless, deceptive, and groundless are completely unfounded.

The Finance Ministry has stated that currently, there isn't any such proposal under consideration by the government.

GST is imposed on fees like the Merchant Discount Rate (MDR) associated with transactions conducted through specific payment methods.

Starting from January 2020, the Central Board of Direct Taxes (CBDT) eliminated the Merchant Discount Rate (MDR) for Person-to-Merchant (P2M) UPI transactions via a gazette notification issued on December 30, 2019.

As there is presently no Merchant Discount Rate (MDR) applied to UPI transactions, accordingly, no Goods and Services Tax (GST) is levied on them.

The government continues to support the growth of digital transactions through UPI, according to the Finance Ministry.

To encourage and maintain the expansion of UPI, an Incentive Scheme was launched starting from the fiscal year 2021-22.

This initiative particularly focuses on low-value UPI (Peer-to-Merchant) transactions, which helps small merchants by reducing transaction fees and encourages greater involvement and new ideas in digital payment systems.

The cumulative incentive distributions through this program throughout the years demonstrate the Government's ongoing dedication to encouraging UPI-driven digital transactions.

The allocation for the program across various fiscal years stands as follows: FY2021-22 was Rs 1,389 crore; FY2022-23 saw an increase to Rs 2,210 crore; and for FY2023-24, it further escalated to Rs 3,631 crore.

"The implementation of these measures has greatly aided in establishing India's strong digital payment system," the ministry stated.

The ACI Worldwide Report from 2024 indicates that India was responsible for 49 percent of worldwide real-time transactions in 2023, solidifying its role as a leading innovator in the realm of digital payment solutions.

The value of UPI transactions has witnessed a significant surge, rising from ₹21.3 trillion in 2019-20 to approximately ₹260.56 trillion by March 2025. Notably, Peer-to-Merchant (P2M) transactions amounted to ₹59.3 trillion, indicating increasing acceptance among merchants and enhanced trust in electronic payment systems. (ANI)