Bill reopens possibility of MDR on UPI, especially for large merchants
The proposed Taxation and Other Laws (Amendment) Bill, 2026 would allow the government to specify which digital payment modes remain exempt from merchant charges. It does not immediately impose MDR on UPI, but creates a route for future notification after passage.
The government’s proposed Bill would let it decide which electronic payment modes remain exempt from merchant charges, reopening debate on MDR for UPI, particularly for large merchants, while not immediately imposing any charge.
Why this matters
The proposal follows recent signals that a Finance Ministry bill could enable MDR on select UPI merchant payments and that UPI MDR could return alongside electronics manufacturing tax relief.
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