The Central Government has clarified that there is no proposal to impose Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions exceeding ₹2,000. Addressing the Rajya Sabha, Pankaj Chaudhary, Minister of State for Finance, stated that the GST Council has made no such recommendation regarding the imposition of GST on high-value UPI payments.
No GST Levy on UPI Payments: Centre Clarifies
Responding to a question in Parliament on whether the Centre is planning to levy GST on UPI transactions over ₹2,000, the minister affirmed that all decisions on GST rates and exemptions are based solely on the recommendations of the GST Council, and no such suggestion currently exists.
This clarification comes in the wake of widespread concern among small traders in Karnataka, who reportedly received GST demand notices based on their UPI transaction data.
Karnataka GST Notices Spark Controversy
Addressing the issue, Union Minister for Food, Public Distribution and Consumer Affairs, Pralhad Joshi, emphasized that the GST notices served to small traders in Karnataka were issued by the state’s Commercial Tax Department—not by the Centre. He criticized Karnataka Deputy Chief Minister D.K. Shivakumar’s claims denying state involvement, calling them “utterly ridiculous.”
Joshi further questioned, “If the Central Government had issued such GST notices, why haven’t traders in other states received them? Why are these notices limited to Karnataka alone?”
GST Administration: CGST and SGST Explained
The Union Minister explained that under the GST system, there are two components: CGST (Central GST) managed by the Central Government and SGST (State GST) managed by respective state governments. The recent notices sent to Karnataka traders, Joshi pointed out, fall under the jurisdiction of the state’s tax authorities, not the Central Government.