Updated

Updated · aamaadmiparty.org · Aug 10

AAP Opposes Proposed UPI Tax Bill, Warning ₹27,000 Crore Burden and Higher Inflation

Updated

Updated · aamaadmiparty.org · Aug 10

AAP Opposes Proposed UPI Tax Bill, Warning ₹27,000 Crore Burden and Higher Inflation

Q: With the new taxation bill paving the way, what hidden threshold will finally trigger fees for India's massive UPI merchant transactions?

The trigger appears to be merchant UPI payments above ₹2,000, though the government has not formally fixed that threshold yet. In Parliament, Finance Minister Nirmala Sitharaman said the Bill is only an enabling provision and that any future Merchant Discount Rate would apply only to a limited class of merchant transactions above a prescribed threshold. She stressed that consumers will continue to use UPI free of charge and that low-value payments, including those to small vendors, would remain unaffected. The additional reporting fills in the likely missing number: officials have indicated a threshold of ₹2,000 for person-to-merchant UPI transactions, with a possible MDR of about 0.25% to 0.4%. Some reports also say policymakers are considering linking any fee to merchant size, with larger businesses more likely to be covered, while small merchants stay exempt. What is settled is that person-to-person payments remain free and no charge has been imposed immediately by the Bill itself. What is not yet settled is the final MDR framework. That decision, including the exact threshold, rate and merchant categories, is to be taken later by the NPCI-led UPI and Services Steering Committee after the law takes effect. So the “hidden threshold” now being widely cited is ₹2,000 for merchant transactions, but it remains a proposal rather than a notified rule.

3 articles · Updated · aamaadmiparty.org · Aug 10

Sanjay Singh urged Parliament to withdraw the proposed UPI tax bill, saying it would hit small traders first and then raise prices for consumers.
The AAP leader said merchants receiving UPI payments would bear the tax, forcing tea sellers, vendors and drivers to pass the cost on and stoke inflation.
Singh linked the bill to a March 31 U.S. Trade Representative objection to India’s zero-tax UPI regime, accusing the Modi government of yielding to Donald Trump while giving foreign investors a 100% tax exemption.
He also rejected the government’s claim that the levy is needed to fund the UPI system, noting authorities collected ₹27,000 crore over two years through minimum-balance charges.
The attack came after Finance Minister Nirmala Sitharaman said consumers would still pay nothing for UPI transactions, though opposition parties warned merchant charges could still filter through to retail prices.

Sources

Left100%

aamaadmiparty.org10d ago

AAP's Sanjay Singh Opposes UPI Tax Bill, Citing Trump Pressure and Inflation Concerns

The Hindu10d ago

Nirmala Sitharaman: UPI Transactions Remain Free for Consumers

YouTube10d ago

Will UPI Be Free In Future? Nirmala Sitharaman Clears The Air On MDR Charges

8 Sources

With the new taxation bill paving the way, what hidden threshold will finally trigger fees for India's massive UPI merchant transactions?

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