Mumbai, April 18: Unified Payments Interface (UPI), the backbone of ted on September 23 Every Year, Government Moves Date to Honour Maharishi Charaka

Mumbai, April 18: Unified Payments Interface (UPI), the backbone of India’s digital payment ecosystem, may soon see a shift in its zero-cost model. If media reports are to be believed, the central government is reviewing a proposal to impose an 18% Goods and Services Tax (GST) on UPI transactions exceeding INR 2,000.

Currently, UPI transactions are free for users, which encourages widespread adoption across both urban and rural India. However, under the proposed revision, digital payments—both peer-to-peer and merchant-based—that exceed the INR 2,000 threshold in a single transaction may fall under the GST ambit. The rationale behind the move is to improve tax compliance and bring high-value digital payments into the formal economy. UPI Services Restored After Nationwide Outage Disrupts Digital Payments for Millions of Users Amid Technical Glitch.

GST on UPI Payments Above INR 2,000?

If approved, an 18% GST—the standard rate for most digital services—could be applied, affecting how individuals and businesses handle high-value digital payments. No official timeline or confirmation has been announced yet.

The development comes amid robust growth in GST revenue. India’s GST collections rose 9.1% year-on-year to INR 1.84 lakh crore in February 2025. This includes INR 35,204 crore from Central GST, INR 43,704 crore from State GST, INR 90,870 crore from Integrated GST, and INR 13,868 crore from compensation cess. UPI Transactions Grow 42% YoY in 2nd Half of 2024 With 93.23 Billion Transactions, Mobile Payment Reach 88.5 Billion: Report.

While the government continues to promote a cashless economy, the proposed GST on UPI could raise questions about the cost-effectiveness of digital payments for everyday users.

(The above story first appeared on LatestLY on Apr 18, 2025 04:35 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).