GST on UPI payments: The government is reportedly reviewing a proposal to impose Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions exceeding ₹2,000. According to media reports, UPI transactions above a certain threshold may attract a higher GST for which the government is trying to review.

Under the revised proposal, digital payments made via UPI that cross ₹2,000 in a single transaction may be brought under the GST framework. The motive behind this is to enhance the tax compliance and bring more digital transactions into the formal economy. If approved, an 18 per cent GST, the standard rate for most digital services, could be levied on these high-value transactions. 

According to reports, once GST is applied to UPI payments over ₹2,000, the peer-to-peer and merchant transactions could both be included. The proposed GST rate is likely around 18 per cent. However, no official implementation date has been announced.

India's GST collections rose 9.1 per cent to about ₹1.84 lakh crore in February 2025. According to official data released on Saturday, March 1, on a gross basis, mop-up from the central GST stood at ₹35,204 crore, state GST at ₹43,704 crore, integrated GST at ₹90,870 crore, and compensation cess at ₹13,868 crore in the month under review.

More to come