The Central Government has clarified that there is currently no proposal under consideration to impose Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions exceeding Rs. 2,000. This assurance came in response to a question raised in the Rajya Sabha regarding the potential taxation of digital payments.
The question, posed by Shri Anil Kumar Yadav Mandadi, sought to determine whether the government was contemplating a GST levy on UPI transactions above Rs. 2,000, and whether any representations had been received from the public opposing such a move due to its likely adverse impact on the common citizen.
In a written reply, Minister of State in the Ministry of Finance Shri Pankaj Chaudhary stated that GST rates and exemptions are determined by the GST Council, a constitutional body with representation from both the Centre and States/Union Territories. He affirmed that “there is no such recommendation from the GST Council” to levy GST on UPI transactions.
The clarification comes amid growing public concern about possible taxation of digital payments, which have seen a dramatic rise in adoption across urban and rural India. The minister’s statement reiterates the government’s stance of promoting digital transactions without adding a tax burden on users.
This statement is expected to allay fears among UPI users and stakeholders in the digital payment ecosystem about potential disincentives that could arise from any such tax policy.
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