The government is reportedly reviewing a proposal to impose Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions exceeding Rs. 2000. According to media reports, UPI transactions above a certain threshold may attract a higher GST for which the government is trying to review.
Under the revised proposal, digital payments made via UPI that cross ₹2,000 in a single transaction may be brought under the GST framework. The motive behind this is to enhance the tax compliance and bring more digital transactions into the formal economy. If approved, an 18 per cent GST, the standard rate for most digital services, could be levied on these high-value transactions.
According to reports, once GST is applied to UPI payments over ₹2,000, the peer-to-peer and merchant transactions could both be included. The proposed GST rate is likely around 18 per cent. However, no official implementation date has been announced.
More to come.
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