Lok Sabha passes Taxation Bill enabling MDR charges on UPI transactions
The Indian Parliament's lower house, Lok Sabha, has passed a new taxation bill that opens the door for imposing Merchant Discount Rate (MDR) charges on UPI transactions. The legislation grants the Central government authority to designate, via official notification, which electronic payment modes or transactions will remain free of charge. This marks a significant policy shift, as UPI transactions have been exempt from MDR since January 2020. The bill effectively gives the government flexibility to decide which digital payment methods continue to carry zero-cost status. The move has drawn attention from merchants, payment platforms, and consumers who currently benefit from free UPI-based transactions.
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