New Delhi : In a major announcement aimed at easing concerns among digital payment users, the Central Government has clarified that no Goods and Services Tax (GST) will be levied on UPI transactions, including those above ₹2,000.
Union Minister of State for Finance, Pankaj Chaudhary, made this statement in the Rajya Sabha during the ongoing monsoon session. He confirmed that there is no proposal to impose GST on UPI payments, and importantly, the GST Council has not made any such recommendation.
“The GST Council, a constitutional body comprising representatives from the Centre, States, and Union Territories, has not proposed any tax on UPI transactions,” said Chaudhary.
This clarification comes after recent reports suggested that around 6,000 users in Karnataka had received GST demand notices based on their UPI transaction data. The news sparked fears that UPI payments might soon attract taxation.
However, the government’s statement has put all such concerns to rest, ensuring that users can continue to use UPI for digital payments without worrying about additional tax burdens.
UPI (Unified Payments Interface) has emerged as the most popular method for digital payments in India, facilitating fast, secure, and cost-effective transactions for both small and large amounts. Its widespread use extends from everyday consumers to small businesses and entrepreneurs.
The government’s decision not to tax UPI transactions is seen as a strong move to boost the Digital India mission and encourage a cashless economy.
The clarification brings significant relief not only to individual users but also to small business owners, many of whom were reportedly avoiding UPI after notices were issued in cities like Bengaluru and Delhi.
