MDR on UPI payments face 18% GST; registered biz can claim input tax credit

Experts say GST will raise the upfront cost of accepting eligible UPI payments, but registered businesses can offset the tax through input tax credit, subject to applicable rules.

Merchants paying the newly introduced merchant discount rate (MDR) on UPI transactions will face an additional 18 per cent goods and services tax (GST) on the charge, raising the upfront cost of accepting such payments. However, businesses registered under GST should then be able to claim input tax credit (ITC) on the tax paid, while unregistered merchants may have to bear the cost themselves, said experts.

Business Standard · 16 Sept, 22:00

Economy, business and finance

MDR on UPI payments face 18% GST; registered biz can claim input tax credit

Experts say GST will raise the upfront cost of accepting eligible UPI payments, but registered businesses can offset the tax through input tax credit, subject to applicable rules.