Fact Check: 18% GST on UPI Payments Over ₹2,000? Government Responds

Rumors have been circulating on the internet, claiming the central government has imposed 18% GST (Goods and Services Tax) on over 2000 UPI transactions. The Ministry of Finance has rejected the rumors and denies that any such proposal has been approved from their side.

On April 18, the news has been circulating in many media outlets claiming that digital payments (UPI transactions) surpassing 2,000 in a single transaction may be brought under the GST.

But, the govt. denied as soon as it reached out to them for authentication, in a statement, the ministry said, “There is no such proposal before the Government,” and cleared the air.

Currently, UPI transactions are free of GST, it has been widely popular among digital payment users, from groceries to online services, everyone is using UPI to become cashless, as carrying cash is always a hassle. The popular transaction system has increased money flow in the indian economy since its introduced in the year 2016, and it falls under the Digital Bharat scheme.

What is UPI (Unified Payments Interface)

UPI (Unified Payments Interface) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. It also caters to the “Peer to Peer” collect request, which can be scheduled and paid as per requirement and convenience.

UPI (Unified Payments Interface) lets you link your bank accounts (any participating bank) in one mobile app. It makes sending money, receiving payments, and paying your bills quicker and easier, and all it can be done with just a smooth touch of your screen.

The project was launched on 11th April 2016 by Dr. Raghuram G Rajan, Governor, RBI, at Mumbai. Following the launch, Banks have started to upload their UPI-enabled Apps on the Google Play Store from 25th August, 2016 onwards.

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UPI Participation in the Indian Economy

According to the report of the PIB, in October 2024, UPI handled a massive ₹23.49 lakh crore through 16.58 billion financial transactions, showing a 45% growth compared to 11.40 billion transactions in October 2023, and in March 2025, it exceed the number above, by ₹24.77 lakh crore through 18.30 billion financial transactions, With 632 banks on its platform, this sharp rise in usage highlights UPI’s growing dominance in India’s digital payment space.

What's the government's stance on GST on UPI

Currently, UPI remains a free and convenient payment method for users, particularly for peer-to-peer (P2P) transfers and payments to small merchants/businesses.

The ongoing debate around applying GST to UPI highlights the dynamic nature of India’s digital payment ecosystem. The government supports and promotes digital transactions, and for being a smart digital user, it’s important for you to stay informed about any potential updates that can affect your finances and payment methods. 

The good news is, for now, UPI is free, and users can continue to enjoy seamless, cost-free transactions without the added concern of GST. Although it's not entirely free,

If you want to know more, how and how much apps charge for any transaction you do, and is it really a good option for small transactions?... comment below the article