Supreme Court refuses stay on UPI fees above Rs 2,000
India's top court rejects plea to halt 0.4% merchant charges set to take effect October 15.
What to know
- Supreme Court declined to halt the 0.4% MDR on UPI payments above Rs 2,000, set to take effect October 15, but asked the government to justify the decision on affidavit.
- Centre argues the charge is a cost-sharing mechanism between banks and payment aggregators, not a tax, and notes 96% of transactions are exempt with capped costs.
- Traders and Opposition parties oppose the move, fearing merchants will pass costs to consumers despite government advisory against doing so.
- Court framed the core legal question: whether the government has executive authority to impose such a charge if it is neither a tax nor a statutory fee.
The dispute Whether merchants will respect the government's advisory not to pass MDR costs to consumers, given the financial incentive to do so.
The fee is unfair and will ultimately burden consumers despite claims it stays within the merchant ecosystem.
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“The petitioner submitted before the court that businesses may pass on the additional cost of the UPI charges to consumers.”
Anjan Datta (petitioner position) · Scroll.in ↗
The fee is a reasonable cost-sharing arrangement with safeguards ensuring minimal impact and no direct government revenue.
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“Government of India is not taking a rupee of this”
N Venkataraman · Indian Express ↗
“UPI also involves banks and aggregators. It's not a statutory collection by the Government of India. NPCI, the nodal body, facilitates. Government of India is not taking a rupee of this.”
N Venkataraman, Additional Solicitor General · Indian Express ↗
Chief Justice Surya Kant Chief Justice of IndiaN Venkataraman Additional Solicitor GeneralAnjan Datta Advocate, petitionerUnion Ministry of Finance Issuing authority
How it unfolded 1 development · click the chart to see its coverage articles
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“If not, what is the executive scope of making this expropriation?”
— Justice Joymalya Bagchi -
4 outlets first by ndtv.com, 1d ago · also NDTV, Telegraph India, Indian Express · read ↗
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Traders in Madhya Pradesh protest UPI fee announcement — Several traders and shopkeepers stage protests by covering QR codes and requesting customers pay in cash, signalling merchant resistance to passing charges along.
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Government announces 0.4% MDR fee on UPI transactions above Rs 2,000 — The Ministry of Finance issues notifications introducing a Merchant Discount Rate on specified UPI person-to-merchant transactions above Rs 2,000, with certain exemptions for essential services and lower rates for financial instruments. The charge is set to take effect October 15.