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Govt Clarifies Proposed UPI Charge Is a Merchant Fee, Not a Tax

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The Indian government and the National Payments Corporation of India (NPCI) have clarified that the proposed Merchant Discount Rate (MDR) on UPI transactions is a payment-processing fee levied on merchants, not a tax, cess, or surcharge. NPCI, which operates the UPI payments network, issued the clarification amid public concern over potential charges on digital transactions. According to government sources, approximately 96% of UPI transactions would remain unaffected by the proposed fee. The distinction is being made to reassure everyday users that they will not face direct charges when making UPI payments.

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