No GST on UPI Transactions Over ₹2,000, Confirms Centre Amid Trader Outcry

The Central Government has categorically denied any plans to impose Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions exceeding ₹2,000, putting to rest widespread rumours and public concern.

Minister of State for Finance, Pankaj Chaudhary, clarified in the Rajya Sabha that no such proposal is under consideration by the GST Council, the constitutional body responsible for decisions on indirect taxation. His statement followed reports suggesting that large-value UPI transactions could be taxed, sparking backlash from businesses and digital payment users alike.

The controversy escalated after several small traders in Karnataka received GST-related notices citing their UPI transaction volumes. These notices, dating back to FY 2021-22, led to confusion and panic, with many traders fearing retrospective taxation. Trader groups argued that personal and business transactions were being wrongly clubbed together, leading to unwarranted scrutiny.

In response, the Karnataka commercial tax department launched a “Know GST” awareness drive to educate small traders and clarify that the notices were only information requests, not tax demands. The campaign includes workshops and helpline support, though dissatisfaction remains high among recipients.

Meanwhile, Union Minister Pralhad Joshi criticized the Karnataka government for allegedly misleading traders and blaming the Centre for a state-initiated action. He urged state authorities to take accountability and ensure better communication.

The Centre reiterated its commitment to promoting digital payments and assured that users will not face any GST burden solely for using UPI. Officials added that traders who comply with registration norms and provide proper records will not be penalized for past transactions.

The clarification aims to maintain public confidence in India’s growing digital payment ecosystem, which has seen exponential adoption through platforms like UPI.