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Re:

No MDR Discussion at 57th GST Council Meeting; States’ Concerns Reported

MDR was not discussed at the 57th GST Council meeting, the Finance Minister said. A report separately says some states wanted GST on UPI MDR cut from 18% to 5%, but no change was decided.
From TheFinanceBase Team2 min to read
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Merchant Discount Rate (MDR) was not discussed at the 57th GST Council meeting, Finance Minister Nirmala Sitharaman said after the meeting. Separately, a report said some states wanted GST on UPI MDR reduced from 18% to 5%; that request was not a Council decision.

Was MDR discussed at the 57th GST Council meeting?

No. Sitharaman said, “There was no MDR-related discussion in the GST Council meeting today,” according to The New Indian Express and Business Today. Business Today also reported that GST rates were left unchanged as the Council focused on other compliance and input tax credit reforms.

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What did states reportedly want?

The New Indian Express reported that some states had concerns about GST on MDR for UPI transactions and wanted the rate reduced from 18% to 5%. The report did not identify the states or name the minister who conveyed their position. This was a reported request, not a rate change approved at the meeting.

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What does the reported 18% GST rate apply to?

The New Indian Express describes the 18% rate as applying to MDR—the merchant discount fee treated in the report as a service for GST purposes—not necessarily to the full value of the underlying UPI payment. This is the report’s characterization; the sources here do not establish the exact legal notification governing GST on MDR.

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What is reported about the proposed UPI MDR and its start date?

The New Indian Express described a proposed MDR framework involving a 0.4% rate for specified person-to-merchant UPI transactions above ₹2,000, subject to caps and exemptions. It said an initial rollout planned for October 15, 2026, was reportedly deferred to January 1, 2027.

That revised date was not confirmed by a primary government or NPCI notice in the sources available here. Treat the terms and timing as reported proposals, not as an officially established start date or a basis for tax-compliance decisions.

What is confirmed—and what remains unconfirmed?

Issue What the reports say What is not established here
MDR at the 57th Council meeting Sitharaman said it was not discussed. The New Indian Express and Business Today report her statement. A Council decision changing GST on MDR; none is reported.
States’ preferred GST rate Some states reportedly wanted a reduction from 18% to 5%. The New Indian Express The states’ identities and a formal Council proposal or decision.
Proposed MDR terms and revised date A 0.4% MDR on specified person-to-merchant transactions above ₹2,000, subject to caps and exemptions; a reported deferment to January 1, 2027. The New Indian Express Confirmation of the terms or new date in an official instrument from the government or NPCI.

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