Will GST Be Imposed on UPI Transactions Above ₹2000? Government Issues Official Clarification

No GST on UPI Transactions, Says Government

In response to recent speculation circulating across social media platforms, the Government of India has officially denied any plans to impose GST on UPI transactions above ₹2000. The Central Board of Indirect Taxes and Customs (CBIC) took to social media platform X to clarify the matter, calling the reports false, misleading, and baseless.

For days, rumors had been fueling concern among small business owners and digital users, fearing that a new GST rule could financially impact regular UPI-based payments. The government’s clarification has brought much-needed relief to UPI users nationwide.

CBIC: Claims Are False and Baseless

Refuting viral posts and media reports, CBIC emphasized that there is no proposal under consideration to levy GST on high-value UPI transactions. In its official statement, the CBIC noted:

“The claims that the Government is considering levying GST on UPI transactions over ₹2,000 are completely false, misleading, and without any basis.”

The clarification added that GST is only applicable to specific services or charges, such as Merchant Discount Rates (MDR) charged by service providers—not on UPI transactions themselves.

Government Actively Promoting UPI, Not Taxing It

Rather than taxing UPI payments, the government has been actively supporting and incentivizing digital payment ecosystems, particularly UPI, to encourage a shift from cash to digital transactions—especially in rural and small-town India.

To promote this, the UPI Incentive Scheme was launched with significant funding:

• ₹1,389 crore in FY 2021–22

• ₹2,210 crore in FY 2022–23

• ₹3,631 crore in FY 2023–24

These incentives help cover processing fees for merchants, encouraging wider acceptance of UPI payments across sectors.

Key Takeaways for UPI Users

• No GST is being imposed on UPI transactions above ₹2000.

• The government is committed to boosting digital payment adoption, not restricting it.

• UPI remains free and accessible for users making peer-to-peer or merchant payments.

• GST, if any, applies to service charges—not the UPI transaction itself.