Aayushi Rana 
Over the past week, a claim circulated widely on social media, alleging that the Indian government would soon impose an 18% GST on UPI transactions exceeding ₹2,000. The news sparked confusion and concern among digital payment users.
The archive link to the post can be seen here
Multiple users were also found sharing the viral claim, which can be viewed here and here.
Fact Check
Upon investigation, we found the claim to be misleading.
Multiple reputable media outlets—including The Economic Times, NDTV, Times of India, Moneycontrol, and Business Standard—have reported that the Ministry of Finance has categorically denied recent rumors suggesting the imposition of Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions exceeding ₹2,000.
In an official clarification released by the Press Information Bureau (PIB) on Friday, the government termed such claims as “false, misleading, and without any basis.”
Additionally, we cross-verified this with the official press release issued by the Ministry of Finance. The statement read:
“The claims that the Government is considering levying Goods and Services Tax (GST) on UPI transactions over ₹2,000 are completely false, misleading, and without any basis. Currently, there is no such proposal before the Government.
GST is applicable only on service charges, such as the Merchant Discount Rate (MDR), for certain payment instruments. However, effective from January 2020, the Central Board of Direct Taxes (CBDT) removed the MDR on Person-to-Merchant (P2M) UPI transactions via Gazette Notification dated 30th December 2019.
As a result, since no MDR is currently charged on UPI transactions, no GST is applicable.”
Why GST Doesn’t Apply to UPI Transactions?
The origin of the confusion appears to stem from a misunderstanding of how digital payments are taxed.
In reality, GST only applies to financial services involving fees, such as service charges or Merchant Discount Rates (MDR). Since January 2020, the Indian government has eliminated MDR fees for person-to-merchant (P2M) UPI transactions via a Gazette Notification dated December 30, 2019.
With no MDR applicable, there is no service charge, and therefore, no GST to levy.
Conclusion
The claim that the Indian government plans to impose 18% GST on UPI transactions above ₹2,000 is false. It has been thoroughly debunked by multiple major news outlets and officially denied by the Ministry of Finance through the PIB.
Siddharth Urmil 
