UPI payments to merchants above Rs 2,000 will attract a 0.4 per cent MDR from October 15, with 18 per cent GST on the fee. Tax experts said eligible GST-registered merchants can claim input tax credit, reducing the overall burden
Zerodha CEO Nithin Kamath backed the introduction of MDR on P2M UPI payments, saying it could increase competition in the ecosystem. However, he flagged concerns for brokers, who could incur charges on repeated client fund transfers without generating corresponding revenue.
The BJP defended the new 0.4 per cent MDR on select UPI merchant transactions above Rs 2,000, while NCP(SP) criticised the move. The reactions followed NPCI’s announcement of the framework, which keeps person-to-person payments free.
