Government Confirms: No GST on UPI Payments Over ₹2,000

New Delhi, April 18, 2025 – The Ministry of Finance has stepped in to clear up some confusion. Lately, people have been talking about the imposition of Goods and Services Tax (GST) on UPI transactions above ₹2,000. According to the government announcement on April 18, 2025, this speculation about imposing GST on UPI transactions above Rs. 2,000 proved completely false. The authorities have made it clear to the public that they do not intend to introduce such a tax.

The Unified Payments Interface provides users with a convenient system to transfer money from their mobile phones. A substantial number of shoppers, along with small stores, find this system beneficial. People who doubted the government would impose UPI transaction taxes on high amounts were proven wrong because those proposals are not moving forward. People making payments to shopkeepers do not need to pay Merchant Discount Rate (MDR) fees according to a Central Board of Direct Taxes (CBDT) decision starting from January 2020. The government intends to maintain the GST exclusion because the Merchant Discount Rate fee must remain eliminated.

The state actively supports UPI because it simplifies payments, along with promoting business expansion for local enterprises. The government began its effort to promote UPI during 2021, at the same time as giving significant financial support. Government funding for UPI payments reached ₹1,389 crore during 2021-22 and increased to ₹2,210 crore in 2022-23 and further grew to ₹3,631 crore in 2023-24 to boost user adoption of the payment system. They are taking digital payments seriously because of their commitment to making them successful.

As a result, India has emerged as one of the leading countries globally for digital payments. According to ACI Worldwide, in 2024, India led global real-time money transfer operations with 49% of the market share in 2023. The growth of UPI payments has increased from Rs 1.3 lakh crore during 2019-2020 to Rs 260.56 lakh crore by March 2025. The everyday usage of UPI by consumers became more widespread as shopkeeper payments (P2M) reached ₹59.3 lakh crore in value.

The government expresses satisfaction with UPI's success. Digital payments in India have undergone positive advancements that benefit the whole population. People on social media platforms show gratitude to the government because it did not implement additional taxation measures. Experts believe the implementation of this decision will boost phone-based money security for wider user groups.

So, don’t worry about extra taxes on UPI! The government wants to keep it simple and free. If you hear weird news, check the Ministry of Finance’s website for the real story (Release ID: 212274). Let’s keep using UPI to make life easier!