New Delhi, Sep 15: Sparring over the imposition of a 0.4 per cent fee on UPI payments above Rs 2,000 to merchants, the Congress on Tuesday dubbed it as "Modi tax" and alleged that a "compromised" prime minister had "surrendered" to US pressure, while the BJP described the opposition party as a "jhooth ki dukaan".
UPI transaction fee introduced
Ending nearly six years of a fully free Unified Payments Interface (UPI) network for merchants, the government on Tuesday introduced a 0.4 per cent transaction fee on payments above Rs 2,000, capped at Rs 300 for payments of Rs 75,000 and above, from October 15, while explicitly ring-fencing everyday person-to-person transfers from any charge.
Soon after the government notification, Leader of Opposition in the Lok Sabha Rahul Gandhi alleged that the Modi government has quietly paved the way for imposing fees on UPI, while Congress chief Mallikarjun Kharge said the Modi government's "loot" has now reached UPI.
The BJP hit back, accusing the Congress of spreading "fake news" to create panic about UPI transaction charges and derail Digital India.
BJP counters Congress claims
BJP spokesperson Pradeep Bhandari called the opposition party a "jhooth ki dukaan (shop of lies)" and said the government has made it absolutely clear that MDR charges will not be levied on consumers. He said 96 per cent of UPI merchant (P2M) transactions are Rs 2,000 or below, and they are 100 per cent charge-free.
The ruling party noted that transfers to family and friends remain free and small vendors are protected by the exemption of Rs 1 lakh per month, while merchants pay 0.4 per cent on payments above Rs 2,000, capped at Rs 300 for payments of Rs 75,000 and above.
Congress general secretary in-charge communications Jairam Ramesh said the government had earlier claimed on August 6 that "no decision has been taken on MDR" and on August 10 the FM said in Parliament that 'no MDR framework has yet been finalised', but on September 14 a notification was issued and within 24 hrs MDR charges were introduced.
"Another example of Modi Govt's FAST moves (First Announce, Subsequently Think)," Ramesh said.
Congress calls it ‘Modi Tax’
Congress' media and publicity department head Pawan Khera said the 0.4 per cent MDR on UPI transactions above Rs 2,000 should be called the "Modi Tax".
"He popularised UPI, wanted all the credit for building a 'cashless economy' -- and now he is taxing people for using it," Khera said on X.
In a post in Hindi on X, Rahul Gandhi said, "Now, MDR can be levied on merchant UPI transactions above Rs 2,000. Even if these transactions account for just 5% of the volume, they make up nearly 65% of UPI's total transaction value."
"The government says no fees will be charged to customers. But where will the fees imposed on shopkeepers ultimately come from? Added to the prices, straight out of the customer's pocket," the Leader of Opposition in the Lok Sabha said.
"Just like with the US Trade Deal, Compromised PM Modi is once again surrendering to American pressure," Gandhi alleged, claiming that US payment companies have long opposed India's zero-MDR policy.
Kharge attacks government
Kharge, in a post, alleged that sky-high inflation has already emptied the common person's pocket.
"Wholesale inflation is near 10%, and the BJP government has planned to impose a 'Digital Payments Tax' on the public, aiming to destroy whatever little savings they have left," Kharge said in a post in Hindi on X.
"Behold the Modi government's biggest flip-flop -- Ten years ago, demonetisation delivered a shock to the country's economy. When questions were raised about the disastrous outcomes of demonetisation, the government argued that it was imposed to promote Digital Payments and a Cashless Economy," he said.
"Instead of providing relief to the inflation-weary public, the Modi government is searching for a new way every day to rob their pockets!!" the Congress chief said.
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Government clarifies consumer charges
"Customers will not be required to pay any charge when making such payments through UPI," the finance ministry said in a statement, adding, "MDR is a charge within the merchant payment ecosystem.
It is not a charge on customers making UPI payments." Also, individuals will continue to have "unlimited free usage, with no monthly quotas, volume restrictions or tiered caps on free UPI transactions", it said.
(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)
