UPI has become a common term for Indians. Not only in the urban areas but in rural areas too, UPI transactions are in trend. But recently a Shocking news for all UPI users broke on the internet. A report says, soon the government will impose a tax on every UPI transaction.
The Reserve Bank of India issued a discussion paper that intends to ask the views of common citizens over the charges on cashless transactions. On August 17, RBI tweeted, “Reserve Bank of India releases Discussion Paper on Charges in Payment Systems”.
The RBI’s latest proposal implies that the central bank is thinking about adding fees to each financial transaction made through the UPI system. Its goal is to assess the possibility of recovering the cost of building and running the UPI infrastructure. According to the RBI, fund transfers made through UPI are equivalent to those made through IMPS, so theoretically, UPI should charge the same fee as IMPS.
Soon after this tweet, the news circulated on the internet that the government is planning to impose tax for every single payment done via UPI ID. Netizens slammed the Modi Government for the new UPI transaction plans. However, later on Sunday, the Government issued a statement that they are not imposing any tax over UPI transactions and UPI payments will remain tax free. The Ministry of Finance said that there is no consideration in the government to levy any charges for UPI services and the concerns of the service providers for cost recovery have to be met through other means.
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The Ministry of Finance tweeted, “UPI is a digital public good with immense convenience for the public & productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means.”
In another tweet the finance ministry wrote, “The Govt had provided financial support for #DigitalPayment ecosystem last year and has announced the same this year as well to encourage further adoption of #DigitalPayments and promotion of payment platforms that are economical and user-friendly.”
“There is no consideration in Govt to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means“, added the Ministry of Finance in reference to the imposition of extra charges for every UPI payment.
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Unified Payments Interface, or UPI, was introduced as an alternative to card payments and as another choice for digital payments. It quickly became successful due to quick payment processing settlement and no charges imposed on users for using it. But the free use rule might alter soon as the RBI is planning something different. However, government assurance can act as fuel to use UPI until we aren’t charged for using it.
