INCOME TAX23 Sept 2026
NPCI dismisses speculation over GST burden due to UPI merchant discount rate as ‘incorrect’ — Here's what it said… | Mint
NPCI has dismissed as incorrect claims that Goods and Services Tax (GST) on the UPI merchant discount rate (MDR) will burden small merchants. From 15 October, a 0.4% MDR applies only on person-to-merchant payments above ₹2,000. Smaller payments stay at zero MDR and zero GST. Merchants can set off GST paid on MDR. NPCI says over 96% of UPI merchant transactions fall under ₹2,000.
Key Statutory Highlights
- From 15 October, UPI person-to-merchant payments above ₹2,000 will attract a 0.4% merchant discount rate, capped at ₹300 for payments of ₹75,000 and above.
- Payments up to ₹2,000 continue to have zero MDR, and government data shows these make up more than 96% of UPI merchant transaction volume.
- Merchants with monthly UPI receipts up to ₹1 lakh are not liable to pay MDR, and GST paid on MDR can be adjusted against the GST payable on sale of goods.
Actionable Advice for Taxpayers / Founders:If you are a small merchant, review your monthly UPI receipts to see where you stand, and speak to your CA about how GST paid on MDR can be claimed against your GST liability on sales.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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