'UPI tax proposal not discussed': Congress MPs on House panel deny backing MDR

Congress MPs Gaurav Gogoi and Manish Tewari have refuted the claim that the decision to levy a fee on UPI payments was supported by them as members of the Parliamentary Standing Committee on Finance.

While Gogoi clarified that the panel did not discuss the "UPI tax proposal", Tewari called out the government for allegedly using the "proceedings of Parliamentary Standing Committees to score brownie points".

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"The Department of Finance did not have any specific proposal on UPI tax when they met the members of the Finance Committee," said Gogoi hours after a senior government functionary reportedly claimed the Parliamentary panel had pushed for a tiered Merchant Discount Rate (MDR) framework for Unified Payments Interface (UPI).

Gogoi said that questions were raised on the need for MDR, but the "representatives of the government did not have any specific or satisfactory answers at that point".

UPI MDR proposal

According to the government functionary, five Congress MPs, including P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath were present on August 12 when the report was adopted and no dissent was recorded in the published minutes.

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Backing his party colleague, Tewari said there was no specific proposal on levying MDR on UPI transactions from October 15. He asserted that no proposal "was ever brought before the Parliamentary standing of Finance- rate, quantam, amount of fee to be charged, ceiling and exemption slabs etc".

Tewari reiterated Gogoi's claim and said concerns were raised over the need and efficacy of the MDR on a conceptual basis.

Govt vs Congress

The government functionary's remarks came after Congress leader Rahul Gandhi's hit out against the decision to charge merchants on UPI payments above ₹2,000.

"Why is Rahul Gandhi opposing something his own MPs including former finance minister P Chidambaram and former minister in the UPA government Manish Tewari supported within the parliamentary panel," news agency PTI quote him as saying.

Reacting to the government's decision to levy a fee on UPI payments above ₹2,000 to merchants, Gandhi alleged that Prime Minister Narendra Modi has decided to "prostrate" before US President Donald Trump and give a huge amount of money to America.

The leader of opposition in Lok Sabha also demanded a rollback of the government's decision to levy a fee on UPI payments.

Fee on UPI: What it entails

The government has introduced a 0.4 per cent fee on UPI payments of more than ₹2,000 made to merchants from October 15. Under this, a merchant discount rate (MDR) of 0.4 per cent is to be levied on person-to-merchant transactions of above ₹2,000. However, no MDR is to be levied on UPI transactions of up to ₹2,000.

The MDR would not apply on person-to-person transactions between individuals, as per a government notification. Automated recurring payments, such as utility bills, OTT subscriptions and mutual fund instalments, made through UPI will not attract the new 0.4 per cent MDR merely because they exceed ₹2,000.