GST on UPI MDR will not burden merchants, says NPCI

The National Payments Corporation of India has said that merchants will not face additional burden from goods and services tax on UPI merchant discount rates (MDR). From 15 October, a 0.4% MDR will apply to person-to-merchant transactions exceeding ₹2,000.

NPCI explained that GST paid on MDR can be adjusted against GST payable on sales through input tax credit. This mechanism allows merchants to offset the tax liability. Small merchants with monthly UPI receipts up to ₹1 lakh will continue to enjoy zero MDR, the payments body said.