The central government has confirmed that there will be no Goods and Services Tax (GST) on UPI transactions above Rs 2,000.
This statement comes after some media reports falsely claimed that GST might be imposed on such transactions.
The government has labeled these reports as completely false and misleading.
Official Clarification by the Government
In an official notice, the government stated that no such proposal is under consideration.
It also emphasized its ongoing commitment to promote digital payments through UPI.
UPI’s Growing Role in Digital Payments
Due to the increasing use of UPI, India’s share in global digital transactions has reached about 46%.
A PwC report recently highlighted that retail digital payments in India have grown nearly 90 times over the past 12 years.
The National Payments Corporation of India (NPCI) also plans to introduce new features in UPI to support this growth.
Massive Growth in Mobile Payments
In the second half of last year, payments through mobile phones reached Rs 198 lakh crore, marking a 30% year-on-year increase. UPI transactions formed a large part of this growth.
UPI vs. Card Payments
During the same period, mobile payments were about 14.5% higher than payments made through credit and debit cards.
Out of these, Rs 130 crore worth of transactions were done through UPI.
Strong Digital Infrastructure
One of the major reasons for this growth is India’s strong digital payment infrastructure. UPI transactions are generally divided into two categories:
Person-to-Person (P2P)
Person-to-Merchant (P2M)
The average UPI transaction size in the second half of last year was around Rs 1,515.
Record UPI Transaction Volumes
In December last year, UPI transactions were worth Rs 23.25 lakh crore, compared to Rs 21.55 lakh crore in November.
The daily average value of UPI transactions in December was Rs 74,990 crore, up from Rs 71,840 crore the month before.
NPCI’s Recent Updates
The NPCI has recently:
Increased the volume limit for UPI transactions for the next two years.
Allowed UPI services for all WhatsApp users, making digital payments even more accessible.
