# NPCI says GST on UPI MDR will not burden small merchants 2026-09-22T10:31:13+00:00 | Business & Economy | Indian Opinion Desk Corroboration: 3 independent outlets The National Payments Corporation of India (NPCI) has said that GST on the Merchant Discount Rate (MDR) for UPI transactions will not burden small merchants. Transactions up to Rs 2,000 will continue to have zero MDR and no GST, and these account for more than 96% of UPI merchant transaction volume, NPCI stated. Merchants with monthly UPI receipts of up to Rs 1 lakh are exempt from paying MDR. NPCI also noted that any GST a merchant pays on MDR can be adjusted against the GST payable on goods sold, so merchants do not bear the cost. Separately, Finance Minister Nirmala Sitharaman clarified that the MDR is a charge between payment operators and will not be passed on to consumers. She said it is neither a tax nor a cess and will not go into the Consolidated Fund of India. The framework, effective October 15, 2026, will apply a 0.4% MDR (capped at Rs 300) to merchant UPI transactions above Rs 2,000. The Times of India reported that Sitharaman blamed the opposition for creating confusion over the charges. ## Indian Opinion Analysis NPCI's defence and the Finance Minister's clarification are the only official framings available, with no source presenting merchant or consumer-side criticism. The coverage is uniform straight reporting of government assurances. The key implication is that the policy's impact hinges on whether merchants below the Rs 1 lakh threshold can truly avoid any cost pass-through, and how many transactions above Rs 2,000 are business-to-business rather than retail. The October 15 rollout date is the next concrete milestone. ## Coverage - economictimes.indiatimes.com (neutral report) Reports NPCI's statement without independent challenge - timesnownews.com (neutral report) Reports Sitharaman's clarification and expert quotes without editorial slant - ndtvprofit.com (neutral report) Reports only NPCI's exemption detail, very brief Tags: GST, Nirmala Sitharaman, NPCI, UPI Canonical: https://indianopinion.org/npci-sitharaman-say-upi-mdr-will-not-burden-small-merchants/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/npci-sitharaman-say-upi-mdr-will-not-burden-small-merchants/#story-in-brief