Amid growing confusion on social media, the central government has officially clarified that no Goods and Services Tax (GST) will be imposed on UPI transactions exceeding ₹2,000. The Finance Ministry addressed these circulating rumors on Friday, calling them "completely baseless and misleading."

In its statement, the ministry said there is no proposal under consideration to impose GST on UPI transactions, regardless of the transaction amount. The viral claim suggesting otherwise is entirely false and lacks any factual basis.

To encourage digital payments, the government had already removed the Merchant Discount Rate (MDR) on UPI and RuPay transactions starting January 2020. Since then, no GST has been levied on these payments, making them cost-effective for both merchants and consumers.

In fact, the government has been actively promoting UPI-based digital transactions, especially for small businesses and shopkeepers. Since 2021, incentive schemes have been launched to support service providers and reduce the operational cost of processing UPI transactions.

These initiatives are designed to compensate for the lack of MDR and to ensure that digital payment infrastructure remains viable and widely accessible. By offering performance-based rewards to service providers, the government aims to make digital transactions seamless and widespread across the country.

As part of its push toward a digital economy, the government introduced a Person-to-Merchant (P2M) UPI incentive scheme starting from the fiscal year 2021. Under this initiative:

• ₹1,389 crore was allocated in 2021-22

• ₹2,210 crore was allocated in 2022-23

• ₹3,631 crore was allocated in 2023-24

These funds are used to support digital payment providers and boost the ecosystem, further encouraging businesses to accept UPI payments without incurring additional costs.

According to ACI Worldwide, India accounted for 49% of all global digital transactions in 2023, showcasing the massive popularity of UPI in the country. In FY 2019-20, the value of UPI transactions stood at ₹21.3 lakh crore. In a remarkable five-year growth trajectory, that number has increased nearly fivefold.

As of March 2025, UPI transactions have touched ₹260 crore, with merchant payments alone totaling ₹59.3 lakh crore, highlighting the growing trust among consumers and businesses in India's digital payment platforms.

Conclusion:
There is no GST on UPI transactions, and the government has no intention of implementing such a tax. The focus remains on strengthening the digital economy through incentives and inclusive payment systems. Citizens are advised not to believe or circulate unverified claims regarding taxation on UPI payments.