GST Will You Pay on UPI Payments Worth More Than Rs.2000? The Bottom Line
If you’ve just heard that transactions above 2000 payable through UPI would be charged GST, then you probably are not alone. Social media is rife with confusion on whether you can make day-to-day digital payments at any cost at all. So what’s the big deal? Explain like I’m five.
What Is the Claim?
A viral message has been circulated on social media, claiming that Goods and Services Tax (GST) has been levied on any UPI (Unified Payments Interface) transaction above 2000, with any payment beyond this limit liable for additional charges or taxes.
What’s the Reality? No GST on UPI for Consumers
Let’s clear the air:
No GST is charged on UPI transactions done by consumers (even if transaction amounts exceed 2000).
According to the Ministry of Finance as well as the Reserve Bank of India (RBI), UPI services are not charged for any service charge or tax on peer-to-peer (P2P) payments and merchant payments. UPI is a government-sponsored scheme, to promote digital transactions and charging fees to UPI users would not align with this objective.
When Does GST Apply?
GST may also be applicable on certain business-to-business services, or where financial institutions provide value-added services to merchants or enterprises at premium rates. [For example: ]
- GST would apply if a payment gateway provides special settlement services to a business.
- GST may be levied on value added services by banks/fintechs whereas on UPI payment itself.
But to normal users pay through UPI at a store or send money to friends/families there is no GST charged, even on transaction of more than 2000.
Official Clarification
The Press Information Bureau (PIB) and several financial specialists have clarified here that no new rule will bring GST on UPI transactions above 2000 for the general public and such viral messages are false or out of context.
Beware of Misinformation
Scare-based news is very easy to spread online especially if it deals with money. DO your best to cross-verify
- Official government handles
- RBI or NPCI websites
- Reputed financial news platforms
Conclusion
GST will not be levied on UPI payments over 2000 (be it grocery payment or car fare or to transfer money for everyday use). UPI will continue to be free and secure for everyday uses. Never believe false forwarding or half truths.
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