NEW DELHI: The government cleared the air on Friday, confirming that there are no plans to impose GST on UPI transactions over ₹2,000. This comes after some reports suggested that such a tax might be introduced. In a statement, the Finance Ministry called these reports false and baseless, adding, "There’s no such proposal being considered right now." To explain it clearly — GST is only charged on certain payment-related fees, like the Merchant Discount Rate (MDR). But since January 2020, UPI transactions from customers to merchants (known as P2M transactions) don’t have any MDR applied to them. And because there’s no MDR, there’s no GST on those payments either. In fact, UPI has grown incredibly fast over the past few years. Payment values through UPI have jumped from ₹21.3 lakh crore in 2019-20 to ₹260.56 lakh crore by March 2025. To keep supporting this growth, the government has been running an incentive scheme since 2021-22 to help cover transaction costs for small merchants and encourage more people to use UPI. In 2023-24 alone, ₹3,631 crore was paid out through this scheme — a big increase from ₹2,210 crore the previous year. The Finance Ministry added that these efforts show the government’s strong commitment to promoting digital payments and making them easy and affordable for everyone.