UPI charges may attract 18% GST

Merchants would have to pay 18% GST on the merchant discount rate (MDR) charges for UPI payments above ₹2,000, experts said on Wednesday. However, the merchants will be able to claim input tax credit on the MDR payments, thereby easing the overall tax burden, they added. GST on MDR payments could generate about ₹3,500-4,000 crore in annual GST collections.