No Interim Stay on Centre's Decision to Impose MDR on UPI Payments: Supreme Court
The bench refused an interim stay and sought the Centre’s response on whether the merchant charge is a tax, fee or expropriation.
- On Monday, the Supreme Court refused a plea for an interim stay of the government's decision to levy a 0.4% charge on merchants for specified UPI Person-to-Merchant transactions in excess of ₹2,000.
- Ending nearly six years of fully free UPI payments, the government introduced a 0.4% fee on transfers worth over ₹2,000 to merchants, while Person-to-person transfers remain exempt and represent 70 per cent of transaction value.
- Additional Solicitor General Venkataraman told the Bench that 96 per cent of users are exempt; for transactions of ₹75,000 and above, the MDR is capped at ₹300, while essential sectors pay a flat ₹5 per transaction.
- The three-judge Bench headed by Chief Justice of India Surya Kant issued notice to the Union of India, RBI, NPCI, and the UPI Steering Committee regarding a constitutional challenge to Section 10A of the Payment and Settlement Systems Act.
- Observing that the matter is "less a legal and more a technical issue," the Bench directed the filing of counter affidavits within four weeks, following advocate Anjan Datta's petition challenging the MDR framework.
33 Articles
33 Articles
SC refuses to stay MDR on UPI, seeks govt's response
The Supreme Court has sought responses from the Centre and others regarding a petition challenging the imposition of a Merchant Discount Rate (MDR) on UPI person-to-merchant transactions exceeding Rs 2,000. While agreeing to hear the plea, the court refused to grant an interim stay on the decision, which introduces a 0.4% fee from October 15, with specific caps and exemptions for various transaction types and sectors.
SC questions legal basis for new UPI charges, declines plea to stay levy
Additional Solicitor General N. Venkataraman, appearing for the Centre, said the government was not collecting the money. Instead, the charge was a settlement fee paid between participants in the payment system.
SC Questions Legal Basis, Character of Charges on Commercial UPI Transactions as Per New Regime; Seeks Centre’s Reply
Get latest articles and stories on India at LatestLY. A bench comprising Chief Justice of India (CJI) Surya Kant and Justices Joymalya Bagchi and V Mohana sought responses from the Central government, the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) on a plea challenging the two Gazette notifications that announced the charges and the process for such charges. India News | SC Questions Legal Basis, Character …
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