'GST On UPI Is A False Rumour': Govt Sources Amid Merchant Concerns Over MDR

Government sources said the GST paid on MDR can be set off against Input Tax Credit (ITC).

Amid concerns that merchants would have to bear an 18 per cent Goods and Services Tax (GST) on Merchant Discount Rate (MDR) charges for UPI payments above Rs 2,000, government sources have termed the claim a “false rumour", saying the GST paid on MDR can be set off against Input Tax Credit (ITC).

The sources said the government does not expect the introduction of MDR to result in a significant increase in cash transactions or a decline in UPI payments after the new charges come into effect on October 15.