GENERAL16 Sept 2026
UPI MDR to attract 18% GST; registered merchants can claim input credit
GST will apply at 18% on the merchant discount rate (MDR) for eligible UPI payments. That raises the upfront cost of accepting these payments for merchants. Registered businesses can still claim input tax credit to set off this tax, as per the applicable rules. If you accept UPI, check your invoices and ask your tax advisor about the credit.
Key Statutory Highlights
- GST at 18% will apply on the merchant discount rate charged for eligible UPI payments.
- This raises the upfront cost of accepting eligible UPI payments for merchants.
- Registered businesses can offset the tax through input tax credit, subject to applicable rules.
Actionable Advice for Taxpayers / Founders:If you accept UPI payments, keep your MDR invoices handy and speak to your tax advisor about whether you can claim input tax credit under the applicable rules.
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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