Oct 15 P2M UPI over ₹2,000 faces 0.4% MDR 18%GST
Heads up, if you use UPI for bigger payments: Starting October 15, person-to-merchant (P2M) UPI transactions over ₹2,000 will have a 0.4% merchant fee (MDR) plus 18% GST on that fee.
The GST Council is meeting on October 7 to talk about possible tax relief, especially for small merchants who aren't registered for GST and can't claim input tax credit.
Local unregistered merchants lose input credit
Many local shops and service providers don't need to register for GST because their turnover is below the threshold, but that means they pay the full MDR and extra tax with no way to get it back.
Tax experts are urging the government to rethink this setup so these smaller players aren't hit hardest by the new charges.
The Council is looking at ways to ease the impact and clear up how these fees should be taxed going forward.