New Delhi, Sep 30: Leading traders’ organisations have withdrawn their proposed October 2 “No UPI Day” protest after representatives met Finance Minister Nirmala Sitharaman in New Delhi on Wednesday over a proposed 0.4 per cent fee on eligible merchant UPI transactions above Rs 2,000.
A delegation of about 20 trade representatives from different states raised concerns about the proposed charge, saying it could increase costs for small and medium businesses and affect the adoption of digital payments among merchants. The traders also sought clarity on the proposed fee and asked the government to consider the concerns of the trading community.
The delegation was led by Praveen Khandelwal, Chandni Chowk MP and secretary general of the Confederation of All India Traders (CAIT).
The All India Consumer Products Federation and the All India Mobile Retailers Association had earlier announced the October 2 protest against the proposed fee. Following Wednesday’s discussions with Sitharaman, however, the organisations decided to withdraw the call.
Khandelwal said after the meeting that the decision followed discussions that he described as constructive, along with assurances that the concerns raised by traders would receive due consideration. He said the trading community was encouraged by the dialogue and would continue discussions with the government on the issue.
The proposed charge, however, remains scheduled to take effect from October 15. Traders’ organisations said they remained hopeful that their concerns would be addressed before its implementation.
The fee has also drawn attention because of its potential impact on merchant digital payments. The traders’ delegation specifically raised concerns about the additional burden the proposed charge could place on small and medium businesses.
The National Payments Corporation of India (NPCI), meanwhile, earlier this month rejected reports alleging that GST on UPI Merchant Discount Rate (MDR) would burden small merchants and make digital payments more expensive.
NPCI said MDR applies only to person-to-merchant transactions above Rs 2,000, while transactions up to Rs 2,000 continue to carry zero MDR and therefore have no GST impact from MDR.
Government data cited by NPCI shows that transactions of up to Rs 2,000 account for more than 96 per cent of UPI merchant transaction volume. Consequently, the majority of UPI payments would not attract MDR or GST on MDR, according to the payments body.
The withdrawal of the October 2 protest leaves the proposed October 15 implementation as the immediate point of concern for traders, who have indicated that they will continue engaging with the government over the proposed charge.
