Daijiworld Media Network - New Delhi
New Delhi, Sep 16: Leader of Opposition in the Lok Sabha Rahul Gandhi on Wednesday demanded the immediate withdrawal of the new UPI Merchant Discount Rate (MDR) framework, calling the charge a "UPI tax" and alleging that the policy would benefit the United States.
Under the new framework, a 0.4 per cent MDR will apply to specified merchant transactions above Rs 2,000. The charge will be capped at Rs 300 for transactions of Rs 75,000 and above. The new framework is scheduled to take effect from October 15.
The government, however, has clarified that the MDR is not a tax and will not be directly charged to customers. Person-to-person UPI transactions will remain free irrespective of the transaction value, while payments to merchants up to Rs 2,000 will also remain free. The Finance Ministry said around 96 per cent of merchant transactions would remain unaffected.
In a video message posted on X, Rahul Gandhi urged Prime Minister Narendra Modi to roll back what he described as the "UPI tax". He alleged that the new framework would place a burden on Indians and claimed that it would result in large amounts of money going to the United States.
Rahul Gandhi also accused the government of giving in to US pressure and criticised Modi by referring to US President Donald Trump. He compared Modi's approach with that of former prime minister Indira Gandhi and said the prime minister should "have a spine" and withdraw the UPI charge.
The Congress leader's remarks come amid a political controversy over the introduction of MDR on selected high-value merchant transactions. Congress and other Opposition leaders have alleged that the move was influenced by US pressure, while the Finance Ministry has rejected any foreign influence in the decision.
The government has said the new framework is intended to make the UPI ecosystem financially sustainable and support its continued expansion, while protecting individuals and small merchants from additional charges.
The government has also said that banks and payment providers will not be permitted to pass the MDR on to customers, while small merchants covered under the zero-MDR framework will continue to remain exempt.