The Unified Payments Interface, also known as UPI, has become a part of people's daily lives today. When this service was introduced, the question of whether people would accept it was raised not only among the people but also in Parliament. But during its introduction, the cheap mobile data plans introduced by jio and Airtel, the 4G service, and the demonetization move brought by the Modi government increased the use of UPI at a rocket speed. Currently, UPI service is available from pet shops to jewelry stores and car showrooms. Since it is easy to use, it is used by both the young generation and senior citizens. Since UPI service can now be used without any fees, various financial transactions are made through UPI. In the last march alone, the total value of transactions made through UPI in india was Rs. 24.77 lakh crore. While the UPI service is widely used across the country and is being used by all sections of the people and all walks of life, it has been reported that a GST tax is going to be imposed on it. In a news report published by Times Now, it has been reported that the central government is considering imposing 18 percent GST on UPI transactions exceeding Rs. 2,000. In some other news, it has been reported that the GST is 5 percent and that the GST tax is only for wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital walletservice transfers. While the central government has repeatedly denied the idea of imposing a tax on UPI services, now the idea of imposing GST on UPI is spreading like wildfire. Although the cash flow in the hands of the people is seen to be decreasing through the UPI service, the cash flow among the people has increased 3 times after demonetization. Many people expect the GST information on UPI to be just a rumor, and similarly, the Union Finance Ministry has not issued any comments on the matter, so the rumor has not been put to rest.
Similarly, if this rumor is true, it will affect individuals to small business owners. Let us examine with the opinions of experts whether GST will actually be imposed on UPI and what will be the consequences if it is imposed. Commenting on the issue, anand K. Rathi, co-founder of MIRA Money, said that it is wrong to assume that GST will be levied on UPI transactions above Rs 2,000. On the contrary, he said that platforms offering UPI payment services like PhonePe, google Pay, and paytm are likely to start charging fees. If such a fee is charged, he explained that an 18 percent service charge will have to be paid on that fee.
He added that UPI is a method of transferring funds from one bank to another or from one account to another. Most bank transfers are free. However, sometimes charges are levied if you make more than a certain number of transactions in a month or when you send funds to another bank. It is important to note that GST will not be levied on the total amount of the transfer, but only on the service charges associated with the transfer. So, don't believe the rumors, let's wait for the official information.
He assured that if any new GST is imposed, it will be applicable only to the service fee charged by UPI and not to the entire transaction amount. But this fee will ultimately be collected from the people, while it is expected that there will be no impact on the P2P service. Finkeda Chairman and Managing director Manish Kumar Goyal expressed concern over the issue. If GST is imposed on UPI, it will be a major setback for the expansion of wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital payment services in india, he said. UPI is currently spreading faster in small towns and villages than in cities. He said that this tax will be a major obstacle in this.
Meanwhile, last month, the Union Cabinet, chaired by prime minister Narendra Modi, approved an incentive scheme worth Rs 1,500 crore to encourage low-value BHIM-UPI P2M (Person-to-Merchant) transactions among small merchants. Under this incentive scheme, all Person-to-Merchant (P2M) transactions for small traders, up to Rs. 2,000, will be subject to zero charges or zero Merchant Discount Rate (MDR) charges and an incentive of 0.15%. This step is taken with an aim to encourage small traders to adopt wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital payment methods on a large scale. This is expected to enhance the spread of the wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital economy and the growth of small traders across the country. This incentive scheme is expected to be very beneficial for traders, especially in rural and small towns.
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In the last march alone, the total value of transactions made through UPI in india was Rs. 24.77 lakh crore. While the UPI service is widely used across the country and is being used by all sections of the people and all walks of life, it has been reported that a GST tax is going to be imposed on it. In a news report published by Times Now, it has been reported that the central government is considering imposing 18 percent GST on UPI transactions exceeding Rs. 2,000. In some other news, it has been reported that the GST is 5 percent and that the GST tax is only for wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital wallet service transfers.
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