Bill proposes UPI MDR return, while extending electronics manufacturing tax relief
A bill tabled in Lok Sabha proposes removing the zero-MDR provision for UPI, potentially adding payment-acceptance costs for merchants. It also outlines long-duration tax relief for electronics contract manufacturing, bonded-warehouse components and other investment-linked activities.
The Taxation and Other Laws Amendment Bill proposes allowing merchant discount rates on UPI by removing zero-MDR restrictions, potentially reshaping payment costs for Indian merchants. It also offers long-term tax relief for electronics manufacturing, data centres, foreign investment and diamond trade.
Why this matters
The proposal extends UPI's recent policy pattern: prior signals flagged removal of the blanket zero-MDR bar and possible MDR on large-merchant and large-value UPI payments.
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