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Merchants Won't Pay Payment Fees: Govt.
17 Sep
Summary
- Government sources stated merchants should not bear payment charges.
- Businesses can claim input tax credit for GST on MDR.
- Enforcement gaps in payment charge implementation will be addressed.
Government sources have asserted that merchants should not be required to cover payment processing fees. Authorities plan to closely observe the implementation of this directive to prevent businesses from transferring these costs to consumers. Discussions have already occurred with payment aggregators to ensure compliance.
Regarding taxation, sources clarified that there is no standalone Goods and Services Tax (GST) specifically on Merchant Discount Rate (MDR) charges. However, GST will be applied to MDR fees associated with UPI transactions. Businesses are empowered to claim input tax credit for any GST they pay on these charges, offering them a way to offset the liability.
