Dehradun (Uttarakhand) [India], September 18 (ANI): Traders’ organisations in Dehradun have opposed the proposed 0.4 per cent Merchant Discount Rate (MDR) on UPI payments above Rs 2,000, saying the move would impose an additional burden on businesses, and warned of agitation if implemented.
The Doon Udyog Vyapar Mandal and other local traders’ organisations said traders are already paying income tax and GST and would not be willing to bear an additional cost on UPI transactions.
Paras Gupta, President of Vyapar Mandal, Paltan Bazaar, said traders adopted UPI payments following the government’s push for digital transactions and transparency.
“Like the government has been saying from the start, we’re going to accept UPI payments, do things online, and take online payments to bring in transparency. But even so, if the tax is just going to be on us—on the businessmen—and the businessmen are the ones who will suffer for it, just like we’re already paying income tax and GST, and now we’ll have to pay tax on UPI payments too… I strongly oppose this. I completely oppose it,” Gupta said.
He said traders could become reluctant to accept UPI payments if they have to bear the additional charge, while customers may not always be able to pay in cash. Gupta also said businesses are already facing difficulties.
“The problem is that now we’ll be afraid to accept UPI payments because we have to pay taxes. We’ll ask customers for cash, but they won’t be able to give it because there just isn’t any cash around in the country right now. So, we’ll hesitate to accept UPI payments too,” he said.
Sunil Kumar Masson, Chairman of Sarafa Bazaar, urged the government to withdraw the proposed charge, saying it would put an additional financial burden on businesses.
“With this new thing the government has introduced where there’s a 40 paise tax on online transactions, we earnestly request them to please take it back. You’re putting an unnecessary extra burden on businesses,” Masson said.
He said the government had promoted Digital India and a cashless economy, while traders had supported digital payments and recorded transactions. Masson said businesses would have to factor the additional cost into the selling price.
Footwear trader Pawandeep Singh said the proposed charge would affect traders and consumers and could also impact tax revenue. He said traders already pay sales tax and income tax and would find it difficult to absorb another cost.
“It ends up hurting the common man; we won’t be able to support it in the future, because how much can we really afford to pay out of our own pockets? We’ll pay sales tax, we’ll pay income tax, and we’ll even pay tax on UPI. We end up paying tax in every possible way, and the common man is the one suffering because of it”, he said.
The traders said the government should provide a subsidy for UPI transactions instead of imposing a charge and warned of agitation if the proposed MDR is implemented.
The reactions come after the National Payments Corporation of India (NPCI) on Tuesday introduced a new Merchant Discount Rate (MDR) framework, under which UPI merchant transactions above Rs 2,000 will attract an MDR of 0.4 per cent, while consumers will continue to transact free of cost using UPI.
The revised UPI MDR framework will come into effect from October 15, 2026, and will apply only to select merchant transactions.
Under the new framework, an MDR of 0.4 per cent will apply to Person-to-Merchant (P2M) UPI transactions above Rs 2,000, with the MDR capped at Rs 300 per transaction. (ANI)
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