UPI payments: GST on MDR applicable, but customers should not bear merchant charges, government sources say
Customers will not incur merchant payment charges as the government ensures businesses don't pass these costs on. Officials are monitoring the implementation closely.
UPI payments: GST on MDR applicable, but customers should not bear merchant charges, government sources say
Government sources have clarified that while GST will be applicable to Merchant Discount Rate (MDR) charges on UPI payments, businesses should not pass these costs onto customers. UPI payments above ₹2,000 will incur a fee of up to 0.4%, capped at ₹300 for transactions of ₹75,000 or more from October 15. Businesses can claim input tax credit against the GST paid on MDR charges.
Stakeholders are monitoring the implementation to prevent merchants from transferring the charges to customers, ensuring UPI remains an affordable payment option. The government may consider alternative fee structures, such as a flat fee, to promote UPI use in investments while maintaining predictable costs for consumers.
Written by urgent.news from Live Mint's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
