GST on UPI transactions? Centre Issues Clarity!

For the last couple of weeks, there have been several discussions about the kind of outages that are being observed in the UPI transactions. This has now started to reach new heights amidst discussions about the kind of GST impositions that could be made on this front.

There have been theories about the central government contemplating the idea of imposing additional GST on UPI transactions above 2000 rupees. This was the news that was in circulation all along and there was anxiety on this factor for a while.

“The claims that the Government is considering levying Goods and Services Tax (GST) on UPI transactions over Rs 2,000 are completely false, misleading, and without any basis. Currently, there is no such proposal before the Government” the statement from the Ministry of Finance read.

“Many brainless people are spreading misinformation and fake news that the Government will charge 18% GST on UPI transactions above Rs . 2000. This is fake news. Sadly, there is no agency at the central level that can take legal action against such fake news, which creates an unrest-like situation with such fake news.” A leading national media personnel said about the same.

To support and sustain the growth of UPI, an Incentive Scheme has been operational from FY 2021-22. This scheme specifically targets low-value UPI (P2M) transactions, benefiting small merchants by alleviating transaction costs and promoting wider participation and innovation in digital payments.