FACT CHECK: Is Govt Planning to Impose 18% GST On UPI Transactions Over Rs 2,000? Here's The Truth

New Delhi: A claim has been circulating across social media platforms and picked up by some digital media portals, alleging that the government is planning to impose an 18% Goods and Services Tax (GST) on UPI transactions exceeding ₹2,000. The purported move sparked widespread outrage, with critics calling it a fresh financial burden on the common man and a step backwards in India’s digital payment revolution.

But what’s the truth behind the viral claim? Is the government really planning to tax UPI transactions?  

Ministry of Finance Issues Clarification

“Government is not considering levying Goods and Services Tax (GST) on UPI transactions over Rs 2,000.  The claims that the Government is considering levying Goods and Services Tax (GST) on UPI transactions over Rs 2,000 are completely false, misleading, and without any basis. Currently, there is no such proposal before the Government”, the Ministry of Finance said.  

The Claim

Media reports and social media users claim that the Union Government will soon impose an 18% GST on UPI transaction values above ₹2,000. One prominent business portal even published an article titled "GST on UPI payments or transactions above Rs 2000? What experts argue" on April 18, further fueling the speculation.

The Truth

The claim is misleading and speculative. The viral claim that 18% GST will be charged on UPI transactions over ₹2,000 is false and unsubstantiated. The original article cited was speculative in nature and clearly mentioned the idea as a hypothetical scenario. No official announcement or proposal exists at this time.

‘No Such Proposal Yet’

Upon reviewing the article that sparked the rumours, it's clear that the story was based entirely on a hypothetical scenario. The article itself stated in its opening paragraph, "But what will you do if a GST of 18 per cent is charged on transactions, will you continue using UPI for daily payments or return to cash? Well, that seems to be a hypothetical situation as of now, considering the way government is promoting digital economy and the scale of UPI in our country."

This directly contradicted the alarmist headlines and social media posts, which misrepresented the article as evidence of a real government proposal.

Further, the article said,"GST on UPI is the talk of the town after multiple reports started doing the rounds that GST will be imposed on UPI payments or transactions above Rs 2,000."

However, no official government source or notification has confirmed or even hinted at such a move. The Ministry of Finance or the GST Council has not proposed or discussed imposing GST on UPI transactions over ₹2,000. The report in question merely discusses a theoretical debate, not a policy decision.

What is Currently Taxed in UPI Transactions?

UPI transactions are generally free for users.

Payment aggregators and merchants may pay a small fee called the Merchant Discount Rate (MDR) on certain transactions, especially for high-value payments via credit cards or wallets.

MDR does not apply to UPI transactions as of now.

If any GST is levied, it is on services offered by intermediaries or service providers, not the transaction value itself.

GST Collections Continue to Rise

India’s GST collections rose 9.1% year-on-year in February 2025, reaching approximately ₹1.84 lakh crore. This includes:

• Central GST: ₹35,204 crore
• State GST: ₹43,704 crore
• Integrated GST: ₹90,870 crore
• Compensation Cess: ₹13,868 crore

This demonstrated the government’s success in indirect tax collections without burdening UPI-based transactions.