UPI MDR to attract 18% GST

The newly-introduced merchant discount rate (MDR) on select UPI transactions will attract 18% goods and services tax (GST), a senior official at NPCI said. “The tax will be applicable as things stand today,” the official said. The Central Board of Direct Taxes and Customs had removed MDR in 2020 due to which there was no GST applicable.

The official also said that the collections through this route would be around Rs 2,000 crore annually to government revenues. “The best case as per this year’s data is Rs 13,000 – 15,000 crore. It may be a bit lower. This would imply GST collections of Rs 2,000 crore or slightly higher.