The National Payments Corporation of India (NPCI) has said that claims that GST on UPI Merchant Discount Rate (MDR) will burden small merchants and make digital payments costlier are incorrect.
In a post on X, NPCI said MDR applies only to person-to-merchant (P2M) transactions above Rs 2,000. Transactions up to Rs 2,000 will continue to have zero MDR and, consequently, no GST impact.
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According to government data cited by NPCI, transactions of up to Rs 2,000 account for more than 96% of UPI merchant transaction volume. As a result, the overwhelming majority of UPI payments will not attract MDR or GST on MDR, it said.
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