GST will be imposed on transactions above Rs 2,000 through UPI? know the government’s decision

In the second half of last year, mobile payments were about 14.5 percent more than the amount spent through credit and debit cards

The central government has refused to impose Goods and Services Tax (GST) on transactions of more than Rs 2,000 through Unified Payments Interface (UPI). Recently, some media reports had said that GST may be imposed on transactions of more than Rs 2,000 through UPI. The government has termed such reports as completely false and misleading.

It has been clarified in a notice that no such proposal is being considered. The government has reiterated its commitment to promote digital payments through UPI. With the rapid rise in popularity of UPI, India’s contribution to digital transactions in the world has increased to about 46 percent. A recent PwC report states that retail digital payments have increased by about 90 times in the last 12 years. NPCI’s plan also includes increasing the features of UPI. In the second half of last year, the value of transactions using mobile phones increased to Rs 198 lakh crore. This is an increase of about 30 percent on a year-on-year basis. UPI transactions have an increased share in this.

In the second half of last year, payments through mobile were about 14.5 percent more than the amount spent through credit and debit cards. The share of transactions through UPI in mobile payments was about Rs 130 crore. A major reason behind this is the strong infrastructure related to digital payments. UPI transactions are kept in two categories – Person-to-Person (P2P) and Person-to-Merchant (P2M). In the second half of last year, the average ticket size of all UPI transactions was about Rs 1,515.

In December last year, the total value of transactions through UPI was around Rs 23.25 lakh crore. In the previous month, this figure was around Rs 21.55 lakh crore. The average value of these transactions per day in December has been around Rs 74,990 crore. In the previous month, this figure was around Rs 71,840 crore. NPCI recently increased the volume limit for these transactions for two years. Apart from this, WhatsApp was allowed to provide UPI services to all users.

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